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Be Wise With Money

How to Talk to Your Adult Children About Your Finances

It can be hard for parents to talk about money with their adult children. Here’s how to start the conversation.

father and son

As you age, it’s essential to discuss the future with your family. Talking about your plans and what financial resources you have is key to making your goals a reality, says Al Kvitek, a Thrivent

Financial representative in Neillsville, Wisconsin. The more family members know, the better they can support plans for the future. “It’s never too early to have these conversations,” he says.

Discussions about the rest of your life can be difficult, says Thrivent Financial Representative Beth Tweed of Baltimore. “[They] require an admission that you’re not going to be around forever,” she says.

A little planning can make the talks easier.

Start the Discussion

A good time to bring up the subject is when you or your spouse announce retirement. It also allows you to lay the groundwork for more in-depth conversations with your children and other loved ones. Those may include where you plan to live and what kind of medical care you’d like to receive.

It’s important to talk about your wishes should you become unable to make your own decisions. “I’ve experienced many cases where a parent loses a spouse to death or disability, and the surviving parent realizes they’re not prepared,” Kvitek says. “If the surviving parent is no longer able to make decisions, it’s an even more difficult situation for the children.”

Without preparation, children are left trying to guess what the parent would want, Kvitek says. If they don’t have the necessary legal documents, it can be impossible for them to act on the parent’s behalf. In order to do so, one or more of the children will have to petition for guardianship, which can be expensive and time-consuming.

Kvitek and Tweed each make a point of taking time during annual reviews with older clients to suggest talking with their children about finances.

“For those who are well into their retirement years, a review of beneficiaries is part of the process,” Kvitek says. “From there, the conversation pivots to, ‘Do you have all your papers in order? Have you talked with your kids about what you want?’ If so, I volunteer to have the whole family in my office, so we can talk about all of these things together.”

They review the parents’ financial documents, investments and inheritance. “I’ll help explain any potential roadblocks, like tax issues for investments that the parents want to pass along to their children, and whether there is enough money for a nursing home.”

Get Documents in Order

As you prepare for your future, you’ll need several legal documents1:

  1. Will: Your will states how you want your probate property and assets distributed after you die.
  2. Durable power of attorney: This document identifies the person(s) who will make financial, legal and tax decisions on your behalf, should you become unable to make decisions on your own.
  3. Advanced medical directive: This document identifies the person(s) you’ve authorized to make medical decisions for you when you are incapable of doing so. Check with your attorney about advanced medical directives available in your state. Medical directives such as a living will and health care power of attorney may vary from state to state.

“When parents have difficulty deciding who among their children should be the power of attorney, I recommend they simply choose whoever is most qualified,” Kvitek says. If one of your kids works in health care, for example, it might make the most sense for that child to be your health care power of attorney.

“It’s generally a good idea to have more than one person named on both your powers of attorney and to specify that they can act independently of one another,” Tweed says. “That way, if one is away or incapacitated when decisions need to be made, there is a second person to take over.”

Your kids should know where you keep these documents. Also tell them where you keep your marriage and birth certificates, insurance policies, deeds and titles to property, mortgage and other loan documents, and tax returns. Pull together a list of financial accounts. If you have a safe-deposit box, be sure your kids know where it is and where to find the keys. Finally, give your children the contact information for your financial representative and legal advisor.

Additional Resources

Thrivent offers several resources to help you plan for the future.

  • Silver Brick Road: As a Thrivent member, you have access to Silver Brick Road, a set of resources to help with aging-related challenges. Online tools include an interactive assessment to determine your unique needs; lists of local service providers; a communications channel to share your care needs confidentially with family and friends; and a wealth of print and video resources.
  • SIMPLIFY: This program manages and pays members’ regular bills. When you have a SIMPLIFY account, Thrivent Trust Company will review and pay your bills with funds from your Thrivent Trust Company investment portfolio’s money market allocation. All payment details are recorded and summarized on an account statement and are viewable online.
  • Your Will and Estate Planning Guide: This downloadable document helps you gather the information you need to help create your first will or update an existing one.

How Children Can Start the Conversation With Parents

If you have aging parents and haven’t yet talked to them about their finances, you’re not alone. “I often learn that clients don’t know anything about their aging parents’ financial resources,” says Tweed.

She urges her clients not to wait for the parents to start the discussion. She suggests children open the conversation with their parents by sharing a personal story.

“The child might say, ‘Mom, Dad—do you remember Jane, whose mom went into the nursing home soon after her dad passed away? I was talking with Jane the other day, and she told me how complicated it was to sort out her mother’s financial affairs because they’d never discussed what her mom wanted or who was to be her power of attorney.’”

That often leads the way to deeper dialogue, Tweed says. It also helps children emphasize that they want to involve their parents in all decision-making.

For extra coaching on how to initiate and guide these important conversations, consider attending one of the “Heart to Heart: As Your Parents Age” workshops offered by Thrivent Financial. These member-led small-group discussions are designed to help adult children talk through finances and the future with their aging parents.

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