By Tammy Wener
We likely all remember receiving or delivering "The Talk" -- that often-uncomfortable discussion between parents and children about the birds and the bees. As we age, "The Talk" transitions to another often uncomfortable discussion between parents and adult children about financial and health matters.
According to a recent Fidelity Investments Family & Finance Study, the majority of parents surveyed feel it is important to talk about money with their adult children. However, in reality, these discussions often don't take place because most don't know what, how much, or when to share.
It is a fact. At some point, children will become involved in their parents' finances and health care, and it is always better for them to be more prepared than less. Better preparation generally results in fewer surprises, reduced stress, and sound decision making. It may also reduce fees and expenses resulting from missed payments, otherwise unnecessary professional fees, and duplication of effort. In fact, according to that same Fidelity study, 93% of adult children and 95% of parents felt greater peace of mind after discussing the parents' situation.
The question, then, is how much should be shared? And when? My recommendation: start sooner rather than later and share enough so that a child is prepared to immediately step in when needed. There are ways to structure the discussion so that parents still maintain some sense of privacy and below is a sample list of questions to help jump-start the conversation.
- Who are the primary physicians?
- What medical insurance is in force and where are the identification cards? How are the premiums paid?
- What pharmacy is used for prescriptions? (Bonus points if the actual medications are shared.)
- Are there any known allergies to medications or otherwise?
- Are there any significant medical conditions?
- If assisted living or nursing home care is eventually needed, what factors are important in selecting one?
- What is the name and location of the primary bank or banks?
- What are the primary sources of income (Social Security, pensions, investment accounts, etc.)?
- How are bills paid?
- If a safe deposit box is used, where is it located, where is the key, and who has access to the box?
- Who are the primary contacts for any investment accounts?
- If the parents are 70½ or older, how are required minimum distributions for retirement accounts handled?
- Who prepares the income tax returns and where are prior year returns kept?
- Do estate planning documents exist? If so, where are they located?
- What is the estate planning attorney's contact information?
- Who has been named to act as a fiduciary (the person/people named to make decisions)?
- Are all financial accounts properly titled, including beneficiary designations where appropriate?
- Have pre-need funeral arrangements been made? If so, where is the documentation located? If not, are there specific wishes for a funeral and disposition of remains?
Keys, Real and Digital
- Is there a list of important websites used, including usernames and passwords? The list does not have to be shared now, but the location of the physical list or information about the software program used to store the list, should be.
- What is the contact information for the auto and homeowner's insurance?
- Where can an extra key to the house be found and/or what is the code to the house?
- If there is a safe in the house, where is the code/key located?
Clearly the above list of questions doesn't cover all of the information an adult child may need to assist a parent (or, for that matter, the information a parent may need to assist an adult child!). That list is too exhaustive for one article. However, just initiating "The Talk" with a few of the above-recommended questions may be all that is needed to open the lines of communication and help everyone involved feel comfortable discussing the uncomfortable. Don't wait for a financial or health crisis to share the information....start the conversation now.
About the author: Tammy Wener, CFP, MBA is the co-founder of RW Financial Planning, LLC in Lincolnshire, Ill., a financial planning firm dedicated to providing objective, thoughtful, and candid advice on an hourly or project basis.