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I'm 29 and both of my parents are about 60. Neither of them take care of themselves. I guess it would be nice to know if they had money set aside for their final arrangements. I've assumed that they do not. The thought of approaching this subject with them makes me nervous. I have worked very hard NOT to follow their example.
Both of our kids are hard workers and savers - and well in control of their finances. They generally know about our financial situation and assets, and consistently urge us to spend more on ourselves.
We actually do spend quite a bit on travel and whatever else we want, but, by habit, have always lived within our means and remained debt free. (I honestly don't know what else to spend money on -- except the grandkids and kids ... we will help fund college for all 5-grandkids).
At the same time, I have always maintained an ongoing financial plan an compilation of assets, which I update about every 6-months. This includes the full complement of wills, trusts, etc. - along with LTC info, etc. This is for both the benefit of my wife, if something happened to me -- or the "kids" - when something happens to both of us. For now, the son is listed as the estate executor, but the daughter is aware of the paperwork location. (We will leave a decent size estate - and pretty much live on a sizeable income, only touching the IRA's etc. for RMD's.
I am probably more interested in making them more fully aware of our assets, than they are in being made aware (We are both in the 70's range. If our health begins to fail or we need help, we will likely get our daughter directly involved, but until then - there doesn't seem to be much point in 'pushing' the information on them (they are both in their mid 40's).
I will share my perspective as a child who was the Executrix of her parent's estate. My mother passed away in 2006 and my father in 2010. My father passed away in the hospital following complications from knee replacement surgery. He was always very private about his and my mother's finances, and just before I took him to the hospital he showed me where the bank books were, life insurance policies, and money he had hidden for an emergency. Fortunately he had placed their home in my and my sister's name many years prior, but settling the rest of the estate took nearly a year because my father had accounts in every bank in town. Thankfully my father had a will, and since it was only two children my sister and myself who were equal beneficiaries of the estate made that part easy, but if there were more children and no will settling could have turned into a nightmare. The only issue I had with my sister was when we went to sell our parents home. She wanted to use a family member who is a real estate agent, and I did not want to bring a family member into the mix especially one that I knew would have only her interests in mine. I thankfully won that battle and the agent we had was wonderful and the sales process when off without a hitch. To this day that real estate cousin that we were not close with in the first place no longer talks to my sister and I because she felt she should have gotten the listing.
You do not have to disclose at this time every dime you have to your kids, but you need to have prepared detailed instructions for your children of all your assets, documents involved with them, and contact persons involved with those assets. If you don't currently have a lawyer, it might be good to establish one so they are already in place to handle the settling of your estate. My father did not have one, but my sister did so we did not have to start the process from square one.
And lastly, death although we don't like to think about it realistically can happen we you least expect it. In a few days will mark the 15 anniversary of the death of my husband. He was 49 when he passed away from a sudden heart attack which was very shocking because he had no known major health issues. With me being the surviving spouse and we had no children there was really no estate to settle, but having really never talked about final wishes I had to make decisions regarding funeral arrangements on what I thought my husband would have wanted. This is not an easy task to do while grieving, so do have that difficult conversation with your family members because it will certainly help them deal better with everything involving your death and what comes after.
Our kids know where our files are, where to find account information, who to contact if the need arises, etc. They don't know exactly what our balances are, what their inheritance would be, etc. That is mostly because that number is ever changing and they haven't really asked I guess. I'm sure as we get older we will have them included more. From experience, not letting someone know about these things just creates a huge mess down the road when you die. It's hard enough having to deal with the loss of a parent, but then having to spend months and months figuring out the estate just doesn't need to happen.
This seems like a good idea. I could put everything on a drive with information updated as needed ; now need to figure how to give them access when it is needed.
You need to do this before it is needed.
Situations can change in an instant and someone will need access to your finances in case/when you're unable to pay your bills.
I've been on my mom's accounts since my dad died. At one point her mental capabilities went downhill so fast that if I hadn't already been on her accounts, she was not in a state of mind to do so. A change in meds and an adjustment period has brought her back up, but that was not a guarantee.
My Dw and I have both spent a few years as Budget Counselors and Tax Preparers. Our household budget and income tax strategy has been to keep our tax liability as low as possible. As a result, I have not paid into Income Taxation for over 35 years. Our children are well aware of this. They have not decided to put the time into learning these topics as we did, they ask us to help with their tax filings every year.
They have always had a general idea of our finances and investments.
This past Spring my in-laws passed away and we received a large inheritance. It will take a few years to transition all of this inheritance from the estate into our hands. We decided to put this inheritance into a couple LLCs, with both of us and our children all as owners. This should help to keep the portfolio intact should my wife and I die, as it then transitions into the hands of our children. For now my Dw and I are managing these LLCs, and our children are fully aware of what they are, their worth and the tax sheltering they will provide. The LLCs paid to bring our children and their spouses home to us for a meeting where this was all discussed.
You should keep an updated list of all accounts, life insurance, account numbers, passwords, etc. - all the relevant information that someone would need to know in a central place in case something unexpected happens.
Aside from that, and absent some compelling reason you haven't mentioned, I don't think children need to know the exact details of your finances unless they need to manage them for you. Otherwise, simply knowing that you aren't about to be evicted and don't owe Tony the Knee-Capper a monthly vig should be all they need to know.
They could be concerned if you have enough money to live on in retirement and to bury you. I would tell them in general terms that you will not have financial problems in your retirement. The reason is so they do not feel that they may have to save money to help support you in retirement.
I think of you as being young, but if you think you will not be moving I would arrange for a prepaid funeral. Think about cremation. Do you, or your children want a service etc. I would ask them and if you do not care I would tell them you want to keep the cost down as you won't be attending.
You need a power of attorney. If you name one of your sons you will have to tell them something about finances. The power is good while you are alive and if properly written if you are incompetent. The power can be restricted to only x checking account or brokerage account etc so you would not have to disclose all your assets.
You also need a health directive (living will) and should discuss with them,
You also need a will. Just tell them where to find it. Do not put in a safety deposit box that they do not have access to.
The above 3 should be done by a lawyer and not be expensive. If the attorney suggest a trust I would be concerned that he might be trying to sell you something you do not need. I would check with a second attorney if you do not think you need it. Most do not need a trust.
For financial assets you can title the accounts as POD payable on death or TOD transfer on death and name the person. Since you have 2 sons probably better to tell the financial institutions that they are beneficiaries. You can do this on line for some firms. Just call them. This avoids probate. This will also superseded your will. You can do the same with your IRA and most assets. DO NOT transfer your home to them.
Write a letter that tells where all your assets are, liabilities, etc so they know what to do. Also tax returns.
I think not telling them your total assets is ok and could be for the best. Just make sure they know what they need to know for their own planning and at your death.
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