How to Talk to Your Grown-Ups About Your Financial Assets

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How to Talk to Your Grown-Ups About Your Financial Assets

At some point in everyone’s life, they have to prepare for a challenging conversation. Talking to your older children about your financial situation is not always easy. Some believe that their situation is not that of their children. Some worry that what they say will upset their children. However, discussing your financial situation with your older children is important. Otherwise, they won’t know how you want your estate to be handled or they may not even know you need help. Fortunately, it is possible to handle the conversation creatively. Here’s how to get started.

Have an Initial Conversation ASAP

The sooner you start talking to your children about your finances, the easier it will be to manage the situation. Whether it’s letting them know they have enough to pay for themselves in retirement – which can be a relief to anxious children – or letting them know what their inheritance might look like, getting the ball rolling is important.

Even if you don’t have a lot of money, giving your kids credit now instead of later is wise. That way, they understand where you are today and can help ensure that your future is secured.

Also, this allows everyone to test the waters when it comes to topics like powers of attorney or estate managers. Ideally, you don’t want to make one of your children executors of your estate if they are uncomfortable with that responsibility. However, you won’t know if someone disagrees with this topic unless you talk about it.

By having the first conversation as soon as possible, you create an opportunity. If you haven’t talked about it before, your children may not know about your final wishes. If you have plans for where your financial assets should go after you pass, telling them now gets everyone on the same page.

Ultimately, these are not topics best discussed during an ongoing crisis. Make plans to sit down with your children as soon as possible so that everything goes smoothly.

Talk to Everyone Together

If you have more than one older child, getting everyone involved in the same conversation can make things easier. It ensures that all your children have the same information, reducing the chances of confusion. Also, it helps you avoid looking like you favor one child over the other, which can make the situation more difficult.

Get into the Topic Little by Little

For many children, thinking about the death of their parents is difficult. If you approach the topic too quickly, their emotions may run high, making the conversation ineffective.

Although you have to start the conversation somewhere, try to use a gentle approach. Let them know you want to plan in case something happens. Also, reassure them that everything is going well today (as long as that is the case).

You can also start a conversation by referring to new information you may have seen. For example, if you read an article about the cost of long-term care, you can mention that and tell your children that it made you think. Then, just get into the conversation naturally.

Focus on the performance of the conversation. Say you have a plan and want to make sure it’s followed. Try to remove any emotional context from the discussion, focusing more on hard facts and numbers.

At least Cover the Basics

In some cases, you don’t want to disclose all the information. If you’re unlikely to need financial help from your kids or have a lot of assets and don’t want them to see dollar signs associated with them, make sure you cover at least the basics.

Let your children know where you keep all important documents. This includes your will, bank and brokerage account information, titles and deeds, power of attorney, and anything else they may need to move forward if the unexpected happens.

Also, take a moment to summarize your financial situation. Let your children know if you have enough to manage your retirement or if you may need support from them.

If you have a strong relationship with your children, you can share more. However, covering those topics should be considered a must-do.

Ask for Professional Help

If you’re nervous about discussing your financial assets and planning with your children, consider getting help from an experienced partner. A financial planner or estate attorney can host a family meeting, making sure you include all the details.

By using the third person, you can greatly reduce the emotional context of the conversation. Also, they can help mediate disagreements or put their foot down on points that are most important to you.

Have you ever had to talk to your older children about your financial situation? Did you find the conversation easy or challenging? Share your experience in the comments below.