Do you find it difficult to discuss with your adult children what should happen with your finances towards the end of your life?
If so, you’re not alone.
People don’t like thinking about their own mortality or losing control. Moreover, as family relationships aren’t always easy, discussing issues such as power of attorney, healthcare proxies, and estate planning can get very complicated. For these reasons, many families push off this conversation for as long as possible.
If you don’t speak with your adult children about your finances, they may have difficulty picking up the pieces and taking care of you and your affairs if you become too infirm to take care of yourself. The emotional and monetary effects of taking care of an elderly parent without any direction can be very hard, especially if your adult children are raising families of their own at the same time.
How to have “the talk”
The best way to let your adult children into your finances is to talk with them. If you can’t physically do that for any reason, compose a list of all your assets, where they are, what you want to happen when you’re no longer able to look after yourself, who would take care of you, and other important issues. Make sure to sign the appropriate documents so your children have the legal means to make financial decisions on your behalf (Power of Attorney, Trading Authorization, etc.)
If you have a financial advisor, invite your adult children to the attend meetings. Let them know who helps you with your finances and who to ask for reliable, objective advice when necessary. While you can’t ever know exactly how long you will live or stay healthy, taking a disciplined approach and sharing your financial situation, goals, and strategies can save a lot of heartache for everyone down the road.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published June 26, 2017.