Why Parents and Adult Children Should Start Planning Together
As the baby boomer population approaches, enters and even settles into their retirement years, they are taking many of the right steps in securing their financial future. However, the vast majority are missing one essential step — they’re not including their adult children in the discussion.
I’ve heard every argument in the book from both sides as to why this isn’t happening, and I feel it is a grave mistake — one that can significantly affect the parents and children alike in the long run. Today, I ask that both parties push their pre-conceived ideas aside and read why collaboration is essential when planning your financial journey.
Parents: Your Kids Aren’t Kids Anymore
You may be thinking, you’re the parent, they are the children. That’s the familial hierarchy and it’s how it’s always been. You’ve never involved them in your finances before — and you ask yourself, why now? Why expose your financial status to your adult children before you have to? And let’s face it, they don’t have as much life experience as you, so you may question whether or not they can even handle such matters.
The fact is, your adult children are probably already well versed in the area of financial planning. More than likely, they have their own investment accounts, retirement plans and even wills, particularly if they have children of their own. They know (and can handle) more than you think.
Since your children came into your life, your first priority has been to protect them. And while you may view shielding them from the delicate topic of financial and estate planning as an extension of that lifelong protection, the opposite is actually true. It is better to enroll them in the process now when you can have informed discussions — where they can hear from your own lips what your wishes are, what you have in place and where they can find it — rather than later on when you’ve fallen ill (or worse) and may not be able to offer a narrative about your plans.
The reality is, when crisis strikes, your children may be given the daunting task of locating estate documents, investable assets, insurance policies and other necessary documents — all while grieving or dealing with the situation at hand. But when they’re aware of your intentions and understand where to locate important documents, they will be better prepared and less overwhelmed when dealing with these formalities.
Think of it this way: when your children were little, you’d never let them blindly cross the street alone without taking your hand. So why would you let them blindly walk through this difficult time without your helping hand to guide them?
Children: Don’t Be Caught Off Guard
As the child, you don’t want to entertain the thought of something bad happening to your parents. You can’t even think about it, let alone talk to them about it. You just can’t go there. All is well now — they’re good, they’re healthy, so why even discuss their long-term desires and financial plans?
I urge you to reconsider. One uncomfortable conversation today can make all the difference tomorrow — for you, your siblings and your parents.
Let’s say one or both of your parents becomes mentally incapacitated and unable to make informed decisions. You’ll need to step in and take charge during what will likely be an overwhelming and emotional time. Think of how much more smoothly it would go if you understood their intentions in advance. Think of the hassle you could avoid if you already had a relationship established with their financial advisor — a relationship that you could lean on for expert guidance.
When you know where everything stands and who to call for help, you’ll be able to confidently make decisions that not only protect your parents’ best interest, but also put their minds at ease that their wishes and plans will be honored.
You also may be able to avoid sibling arguments that commonly surface during times like these. Sure, your sibling relationships are on a steady footing now. But that can change in an instant when emotions are high and assumptions are made. I’ve seen this play out all too many times. One assumes one thing, the other assumes something else, all with the best of intentions as everyone believes that they know what’s best for their parents. But nobody really has all of the facts — that is, unless everyone proactively sits down together to lay it all out on the table.
I understand that this isn’t a fun conversation to have. But isn’t the temporary discomfort you may feel today worth the peace and comfort you’ll feel later on when the time comes?
Make the Unavoidable Easier on Everyone
The transition of assets from one generation to the next is a fact of life. Neither party can escape this reality. Get everyone involved now, before it’s too late.
Parents: talk to your adult children. Let them know where necessary items are and how they should be handled. Include them in conversations with your trusted advisors and ask for their thoughts.
Children: broach the subject with your parents. Don’t be caught off guard later when you’re dealing with the myriad of emotions and burdens that go along with a parent who’s fallen ill or has passed. Inevitably, you’ll be the one making decisions on their behalf. Make it easier on yourself while respecting your parents’ wishes in the process.
Business Development Specialist Joel Morales contributed to this article.
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