Simple Steps To Follow For Family Money Talks

Why is having discussions with your children and perhaps your aging parents regarding personal financial details so important when it comes to estate planning? Jason Waugh, Wealth Advisor with Third Coast Advisors is passionate about working with families to ensure optimal financial success in retirement and offers practical strategies for those that aspire to live a purpose filled retirement.

For most of us, achieving financial security, retiring with optimal wealth, paying the least amount in taxes and leaving behind a lasting legacy are financial and legacy goals we strive to attain during our working years.

Have you ever tried to put together a jigsaw puzzle without the picture on the box? That’s hard, right? Similarly, putting together your financial strategy to enjoy a comfortable retirement without a roadmap and process to follow is difficult. You work hard to create your financial security and having conversations with your loved ones about how you want that managed is a critical piece of that planning.

Why is having discussions with your children and perhaps your aging parents regarding personal financial details so important when it comes to estate planning? Jason Waugh gives us critical information as it pertains to these conversations on how to approach them, details necessary to discuss and tips and strategies on how to navigate this sometimes difficult subject.

Asking these questions and following these simple guidelines can help make the process simpler

Why is it so hard for aging parents and their adult children have the money talk? 

These are some of the common misconceptions.

  • It’s none of their business,
  • I’ve taken care of everything
  • It’s not an easy talk 
  • people are unsure of how to start
  • My family doesn’t want to have the conversation

2.What are the key things family member(s) should know and be asking their parents?

Do they have will, medical power of attorney, trusts?

Location of legal documents?
Who is to be executor of the estate?
Wishes for final arrangements at death.
Beneficiary designations updated.
Divorces, minor children, stepchildren, etc.

3 Why is it important for parents to help their children understand the financial details when it comes to their estate planning matters?

Failure to plan can result in nightmare scenarios
Courts control your assets
Beneficiary losing inheritance to creditors
Stranger, not a loved one, making financial and medical decisions for you and your family

A judge could decide who cares for minor children

Children lose inheritance to your spouse’s new spouse

4. Why is open/honest/complete communication so important?

Provides a well-defined plan during a difficult and complex time.

Minimize surprises and manage expectations.
Lessen any potential misunderstandings and or confusion .

Decrease likelihood that family members come to odds.

Makes your wishes known.

5. What are the specific documents an individual should have in place to ensure the safety of their estate?

Will and/or trust
Financial Power of Attorney
Beneficiary Designations
Living Will
Medical Power of Attorney
Make sure documents are stored in a secure location where someone knows where they are.

6. What are considerations when choosing the right people/persons to represent a parent’s estate?

Make wise choices about who will carry out key roles to execute your plans. These people need to be willing to carry out your wishes no matter how hard it is to do so, and unpopular their decision may be.
You are trusting them to protect your wealth, yourself, & your loved ones. You need to have clearly identified who will fill certain roles. Executor/TrusteeFinancial

Power of Attorney

Healthcare Power of Attorney

7. What are some tactics to open the discussion or approach to have the conversation with a parent?

Have a family meeting; This meeting needs to be scheduled, structured, and focused on specific topics.
Remain calm, be and open and honest.
Concentrate on the plan of action to ensure when time comes to implement the plan there is no confusion.

Script the meeting, introduction and purpose of the meeting.

Encourage frank discussion.

8. Explain intentions to family

Share examples of others having done this

Share documents
Answer questions
Designate the roles

Ask for their commitment

9.Close
Thank everyone for their commitment Transition to fun lighthearted event

10. Best Practices
Focus on one topic at a time
Allow others to voice their opinions and let their voice be heard

No distractions, everyone in the moment
No yelling, ok to disagree but set expectation that this is a difficult discussion, and everyone needs to be respectful.
Ultimately it is your decision and you do not have to justify decisions.

Do not schedule this meeting during normal family gathering, ie Thanksgiving.

Not every conversation will be easy but applying these ideas will get the conversations started. So what are waiting for? Set the stage and start the conversation and in doing so, will hopefully help your family avoid misunderstandings and family conflict.