At some point in nearly everyone’s life, they have to prepare for a challenging conversation. Speaking with your adult children about your financial assets isn’t always easy. Some believe that their situation isn’t their kid’s business. Others worry that what they have to say will disappoint their children. However, discussing your financial circumstances with your adult children is important. Otherwise, they won’t know how you want your estate managed or might not be aware that you need help. Luckily, it is possible to handle the conversation skillfully. Here’s how to begin.
Have the First Conversation ASAP
The sooner you start talking to your kids about your financial assets, the easier the situation is to manage. Whether it’s letting them know that you have enough available to cover you in retirement – which can be a relief for worry-prone kids – or letting them know what their inheritance may look like, getting the ball rolling is critical.
Even if you don’t have many financial assets, letting your children know now instead of later is wise. That way, they understand where you are today and can help make sure that your future is secure.
Plus, this lets everyone test the waters when it comes to topics like powers of attorney or estate executors. Ideally, you don’t want to make one of your children the executor of your estate if they aren’t comfortable with that responsibility. However, you won’t know if someone is averse to that title unless you talk about it.
By having the first conversation as soon as possible, you are also creating an opportunity. If you’ve never spoken about it before, your children might not know about your final wishes. If you have plans about where your financial assets should go after your passing, telling them now gets everyone on the same page.
Ultimately, these aren’t topics best discussed during an ongoing crisis. Make plans to sit down with your children as soon as you can to get everything moving in the right direction.
Talk to Everyone Together
If you have more than one adult child, getting everyone involved in the same conversation can make things easier. It ensures that all of your kids have the same information, decreasing the odds that there will be any confusion. Plus, it helps you avoid looking like you are favoring one child over another, which can make the situation more volatile.
Ease into the Topic Slowly
For many children, thinking about their parents passing away is hard. If you approach the subject too quickly, their emotions may spike, making the discussion less effective.
While you do have to start the conversation somewhere, try to use a gentle approach. Let them know that you want to plan on the off-hand chance something happens. Also, reassure them that everything is fine today (as long as that is actually the case).
You can also initiate the discussion by referencing new information you may have seen. For example, if you read an article about the costs of long-term care, you can mention that and let your kids know that it got you thinking. Then, just segue into the conversation naturally.
Focus on the practicality of the discussion. Mention that you have a plan and want to make sure it is followed. Try to remove any emotional context from the conversation, concentrating primarily on facts and hard numbers.
At Least Cover the Basics
In some cases, you don’t want to divulge every detail. If you aren’t likely to need financial assistance from your children or have substantial assets and don’t want them to see the dollar signs associated with them, then make sure you cover the basics at a minimum.
Let your children know where you keep all the critical documents. This includes your will, banking and brokerage account details, titles and deeds, powers of attorney, and anything else they may need to move forward should the unexpected occur.
Also, take a moment to summarize your financial situation. Let your kids know if you have enough to manage your retirement or if you might need support from them.
If you have strong relationships with your kids, you can certainly share more. However, covering those topics should be considered a must-do.
Enlist the Help of a Professional
If you are nervous about discussing your financial assets and plan with your children, consider getting help from a seasoned ally. A financial planner or estate attorney can facilitate a family meeting, ensuring you’ve covered all of the details.
By using a third-party, you can decrease the emotional context discussion significantly. Plus, they can help mediate disagreements or put their foot down on points that matter to you most.
Have you ever tackled talking to your adult kids about your financial assets? Did you find the conversation easy or challenging? Share your experience in the comments below.
Read More:
- How to Talk About Money with Everyone in Your Family
- What Is an Immediate Annuity and Is It Right for You?
- Money Management Tips for Couples: Have a Sit Down Night
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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