Nine out of ten of our adult children think we the parents ought to discuss our finances with them. We the parents think so too--to a slightly lesser degree of 3 out of 4 of us. And yet, the 40/70 talk doesn't happen--at 50/80 or 60/90 or any other age pairing.
In part, it's because money is an emotionally charged topic. For those of us at the older end of the parenting cycle, we may see our portfolio as a measure of how we've done in life. If the nest egg is not as munificent as we hoped, we might not want our kids to see us as smaller than we've lived. Or we may see talking about how we'll finance retirement and long-term care as an uncomfortable reminder of our mortality and vulnerability. Or we may think we've got plenty of time to do it.
As someone who's going down that road right now, I'm finding it's not as painful or difficult as I thought it might be. Just the opposite. Adult children may come to the conversation with new ideas, technological efficiencies, fresher ways to manage things. In our family, we aren't having the conversation with an eye toward their taking over our finances but rather to their being prepared should such a time come. We are, after all, no longer in the flush of our youth or even in the stability of middle age. My operating principle: if they know what there is and where it is, it will be easier for them to handle the material side of our legacy--or pay our bills if we're temporarily unable to do so ourselves.
Here are some tips we've come up with on this first leg of our money-talk journey.
Passwords: I'm still stuck in the dark ages. I have my passwords listed alphabetically in a little notebook. Nothing wrong with that. But a digital form might be a good backup. The bottom line is that my kids need to know how to access my phone, my computer and my savings/checking accounts. Access to the phone is key. It's where accounts of all kinds send verification codes. Our kids won't be able to take care of business unless they are able to verify via our phone.
Estate Plan: They don't have to know the details of our will--who's getting what or whether it's all going to a favorite charity. They do need to know the processes we've put in place. Are investment accounts, checking accounts. saving accounts in joint names. Are there pension plans, powers of attorney, and health care directives that cede them decision-making powers--or name other parties to take over.
Largesse: If we're helping our kids out financially--sending them, say, $500 a month to pay down their mortgage--they need to know how solid that financing will be if something happens to us that puts that payment in jeopardy. If we fall ill and, say, need extended care, they may need to have contingency plans, as do we.
painting: Berthe Morisot