I read a story the other day and was shocked by two statistics. First, only 32% of boomer age parents had disclosed their finances to their children. And second, only 44% of parents over the age of 67 had.
Why haven’t you talked to your children?
Maybe you have a good reason for not discussing your finances with them. You might have been raised to just not discuss money or if you’re not doing well financially, you might be afraid this information would scare or worry your kids.
Might be costly
The problem is that if you keep secret key details about your finances, it could cause problems – financially and emotionally. If you have adult children, they could be worrying about you needlessly or unprepared to help if you have a sudden need for financial assistance. Or they may have unrealistic ideas as to how much or how little you could help them. According to most financial experts, the more open you can be with your children about your finances, the better.
The least they should know
While it’s not necessary to share all your financial details right down to how much you have in your checking account, there are some basic things they should know in the event you die or become incapacitated. For example, they need to know if you have a will, trusts and a health directive and where they can find these documents. They should know the name of your attorney and broker (if you have one). If you would like one of your children to serve as your executor, you should first ask him or her if they feel all right about this. If you care about your funeral, you should have written instructions explaining your preferences.
Your medical directive
Before you give one of your adult children your health care proxy, you need to talk about life support – what you want done and when and if you want to be taken off life support. There have been cases where children just haven’t been able to carry out their parents’ wishes. This is why it’s probably best to put everything in writing in the form of a medical directive or what’s also called an advance directive. I have one that’s five pages long so that no one can mistake what I want should I become incapacitated.
Make a list
Finally, you should have a list of your bank accounts, investments, real estate holdings and insurance policies- especially your life insurance policy or policies. You need to also include information about a long-term care policy if you have one. If you have a safe deposit box, be sure to list where it’s at and who can access it.
If you’re not comfortable giving all this information to your kids
If you just wouldn’t feel right about giving all this information to you children, you could give it to you attorney and then let you kids know where it is.
Do you plan to leave them money?
If you will be leaving money to you children, you need to tell them about it unless it’s so much money you’re afraid the news will kill their work ethic. It could also be misleading information because your investments might tank or you might outlive your term insurance, leaving them with much less money than they were counting on.
How secure will you be in retirement?
According to a recent study, about 50% of baby boomers’ children are worried their parents won’t have a secure retirement. You can eliminate these fears by providing them with enough information for them to know you’ll have financially secure “golden years.” This could include the size of your pension, your social security and any other assets.
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