I think after years of writing this column for the Examiner it should be pretty apparent talking about money comes easily for me. In fact, it’s something I really enjoy doing. However, recent research from Empower shows I am in the minority of people who feel comfortable talking about the subject. According to the study, 75% of Americans don’t talk about money with friends, 63% avoid the subject with family, and even more astonishing to me, 46% don’t broach the topic with their spouses.
The older one gets, the more dangerous it is not having these money conversations. Unfortunately, according to the same study todays seniors are less than half as likely to be having these conversations as younger people are. I think part of this is generational. The parents of baby boomers were known as the “silent generation” for a reason. Some of their habits of not sharing much were passed down to their children who still view the topic of money as inappropriate or fraught with risk.
It’s really a shame many feel this way, because the real risk comes from not sharing with those you love the financial condition you are in. Particularly if one day those same people will be tasked with stewarding those finances. I cannot tell you how many widows I have counseled who are left completely in the dark about their own financial condition after a spouse unexpectedly passes away. The difficulty that comes with putting the pieces of one’s personal life back together after such a tragedy becomes compounded when also tasked with putting the pieces of their financial life together too.
As someone who is part of Generation X we face our own challenges with regards to knowing the financial picture of our aging parents. Are they likely to be financially solvent their entire lives, or is there a chance they may need our help in their later years? Have they established a plan for their estate that may include us as beneficiaries? If so, who will be responsible for the execution of these final wishes?
These are all questions I would guarantee you almost every person with aging parents have. But too often they don’t get asked out of fear of coming off as greedy or prying. This is why it is so vitally important that those now in their golden years initiate these conversations both with their spouses and their kids.
Yes, it can be morbid, and a bit awkward. It might even be difficult depending on your financial condition or what your final wishes are. But if these are people that you love it’s worth it. After all, you don’t want your final act on this earth to be the creation of a mess someone else has to clean up.
If you’re not sure where to start, I suggest putting together a simple legacy binder. It should include your will, Insurance policy information, property information, trust documents, investment and bank account information, current tax returns, copies of personal documents like social security card or driver’s license, digital passwords and finally notes to loved ones. Once this has been created it is vital that someone other than you know where it is and be given access to it.
After that, I strongly encourage you to schedule a family meeting to discuss the things contained in this binder so there are no surprises later on. The classic scene where the grieving family gather at a lawyer’s office to learn the final wishes of a loved one is great for movies and TV, it is terrible for real life.
If you work with a financial advisor speak with them about facilitating this meeting. Most would love to have this opportunity to partner with you on this, and can often speak more intelligently about your overall financial picture than you can.
Sir Francis Bacon once said “knowledge is power” it’s time more seniors share some of this power they are holding onto with those they care about. I guarantee if you do this you will feel better, and your loved ones will too.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)