Provided by Bennett C. Whitlock III, CRPC®
If you haven’t discussed your parents’ long-term financial goals with them, you aren’t alone. Over one-third of adult children say they haven’t had this conversation, according to recent research by Ameriprise Financial.1 While talking about this sensitive topic may seem uncomfortable, addressing it sooner rather than later can help eliminate challenges and uncertainty down the road. In fact, the Ameriprise Family Wealth Checkup study found that families who make time to talk about money matters feel more confident about their financial future. Not sure how to broach the subject with your parents? The following questions can help you start the dialogue:
- “What do you want to accomplish over the next five to ten years?” Understand your parents’ aspirations for the next few years. What are their personal and financial goals? If your parents are not yet retired, ask them when they plan to leave the workforce and what they want to achieve before they do. If your parents are retired, ask about how they want to spend their time. Will your parents move to a new state? Travel more? Pick up a part-time job or find a volunteer opportunity? Getting a sense for how your parents want to spend their time will help you get on the same page with what to expect in the years ahead.
- “Where can I find financial information in case of an emergency?” Unexpected events or illness can occur at any time. If something happens to your parents, it’s important for you to know how to access key personal, financial and estate planning materials. Contact information for their financial advisor, tax professional, estate planner and lawyer is a great place to start. Make sure your parents have the right permissions in place so that you can step in when the need arises. Many professionals require documented authorization before they can legally discuss information with a family member.
Also, ask your parents to consider sharing passwords for key accounts or letting you know where you can find a list of them. Having access to your parents’ smartphones, computers, social media or other accounts can help in an emergency.
- “What do you want your legacy to be?” As people enter and move through retirement, they often become more focused on the legacy they want to leave behind. Ask your parents how they hope to be remembered, and what their plans are for making that happen. The following elements can be pivotal to the conversation:
- Will and trust: Ask your parents if they have an updated will or trust, and if there’s anything they’d like to share about how the assets will be distributed. The Family Wealth Checkup study found that while most survey participants (83 percent) expect to leave an inheritance, only 21 percent have told their children how much they may receive. As a result, children’s expectations don’t always match reality. Having a conversation about why your parents are allocating certain amounts to family members, charities or foundations can help prevent future conflict.
- Health care: Health care choices and expenses are often major sources of stress for retirees. Discussing your parents’ desires about current health priorities, possible assisted living facilities or treatment options can give your family a roadmap to follow for future decisions. Ask parents if they have formalized their wishes in a health care directive, which is a legally binding document that allows them to choose a loved one to make medical decisions if they are unable to decide.
- “What support do you want from me?” Extending an offer to proactively help may eliminate frustrations or relieve stress for even the most independent and well-prepared parents. Keep in mind that assistance may be nonfinancial – such as completing house projects, planning more time with their grandchildren or helping identify how they can get involved in activities. Consider including a financial advisor or attorney in the discussion if your parents have financial or estate planning to-dos or questions.
Retirement and legacy planning can be complicated, but having regular discussions with your parents can help you both prepare for the future. If you’ve already covered the necessary ground, a scheduled check-in can be helpful in case your parents’ plans or your family situation changes.
Bennett C. Whitlock III, CRPC®, is a Private Wealth Advisor and Managing Director with Whitlock Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, Inc. He offers fee-based financial planning and asset management strategies and has been in practice for 22 years. To contact him call 703.492.7732 or visit his website at whitlockwealth.com
12848 Harbor Dr., Suite 101 Lake Ridge, VA 22192.
1 – The Family Wealth Checkup study was created by Ameriprise Financial, Inc. and conducted online by Artemis Strategy Group November 23 – December 15, 2016 among 2,700 U.S. adults between the ages of 25-70 with at least $25,000 in investable assets. For further information and details about the study, including verification of data that may not be published as part of this report, please contact Ameriprise Financial or go to Ameriprise.com/familywealth.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.