Money isn’t an easy subject for most families, but having open conversations with your adult children about your finances is one of the most thoughtful things you can do. It helps avoid confusion later, ensures your wishes are respected, and gives everyone peace of mind.
Why Financial Conversations Matter
Life doesn’t always go as planned. Health and financial issues can come up, and you may need assistance. When your adult children know your general financial situation and your wishes, they can step in more easily if needed, reducing stress and conflicts on both sides.
When and How to Start
There’s no perfect moment, but it’s best to pick a time when it’s relatively calm. It’s natural for both sides to feel uncomfortable. Money, illness, and death are difficult topics. To make it easier, start with something very practical, like where you are storing your important documents.
Remember, this doesn’t have to be one big conversation. You can break it up into several shorter discussions over time. Also, give your children the opportunity to share their concerns and expectations. This should be a dialogue.
Documents to Share
You don’t have to reveal every detail about what you have, but you should share key information, such as:
- Location of your financial and digital assets, insurance policies, estate planning documents, and other important papers.
- Names and contact information for your legal and financial advisors and other individuals who should be contacted in the event of your death or incapacity.
- A list of what bills are paid regularly and how (by mail or automatically).
- Your credit card account numbers and customer service numbers.
- Location of your passwords to computers, tablets, cell phones, and online accounts.
Create a “just-in-case box” with all this information. You can keep a copy in your home safe, but it’s also a good idea to have digital copies with backups and let several trusted loved ones know where to find them.
Long-Term Care Plans
Be open about your preferences and what you’ve planned for or would want if you become ill or incapacitated. Would you prefer to stay at home or move to assisted living if needed? How would you pay for care? Do you have long-term care insurance? Have you engaged in Medicaid planning? If not, have you set aside savings? You don’t have to share everything but research your options and costs so you understand what you can afford and the likelihood that you may need help.
Also, if you don’t have a spouse, let your family know who you’ve named as your power of attorney and healthcare proxy, and why, to prevent confusion or conflict later.
Inheritance
The topic of inheritance can be sensitive. You don’t have to provide details about your will, but it can be beneficial to discuss your intentions and values in how you’re distributing your assets. In particular, explain anything that might surprise your children, such as unequal distributions to your kids, conditions on a trust, special bequests, charitable donations, or other provisions. This conversation can help avoid hurt feelings and lawsuits later.
Keep the Conversation Going
Revisit these topics regularly, especially if there has been a change in health, finances, or family on either side.
Get Help
If you feel overwhelmed at putting together a just-in-case box or having a conversation with your loved ones, a daily money manager can help.
I assist clients with organizing their finances and documents and can explain them to family members if needed. I also help those struggling with managing their day-to-day financial affairs. Contact me for a free consultation to learn more.
