I received a call one morning from a college friend who asked if we could have lunch that day. I could tell from his voice that something was troubling him.
We met for lunch and after ordering our food, I asked what was going on that he needed to meet so suddenly. His answer is a common problem that nearly everyone experiences.
“I am having dinner with my parents tonight and I want to talk to my parents about their money, but I don’t know how to ask them.”
Thankfully there is a great way to open that conversation today thanks to the Queen of Motown Aretha Franklin dying without a will.
Approach your parents with “When I heard about Aretha Franklin, I wondered whether you had a will and that led to other questions running through my head.”
Five Money Conversations Every Family Needs to Have
Have you done any Estate Planning? Estate planning is more than just having a will. A will is important, yet you only are going to need the will when you die. The other estate planning documents that are just as important are a Power of Attorney, a Medical Power of Attorney, A HIPPA release and a Directive to Physicians. Having these documents makes life easier for everyone.
Where’s Waldo? This is a fun book for children and adults to try and find Waldo, however, searching for your parents’ important documents is not something you want to do. You should ask your parents now whether they have a safety deposit box, where they have filed their will, and any other pertinent documents. You aren’t asking your parents to divulge their net worth, but you should be understanding where these documents are especially if you are playing the executor role.
Do you have a social will? Consider the size and details on your online digital presence from social media accounts to banking and credit card accounts The U.S. government wrote a blog post about this very topic and suggested that people create social media wills that spell out how their online identities are to be handled after death.
Do you have long-term care insurance? The cost of an assisted living facility is more than $4,500 per month on average and the cost of a private room in a nursing home is more than $7,000 per month. If your parents don’t have long-term care insurance, will they have enough resources to pay for the long-term care of their assets? This is an important question for you to know because you might want to buy your parents a long-term care policy to potentially preserve your inheritance. Or, what could be worse is if your parents are expecting that they will move in with you and you are not expecting this at all.
Who are your key advisors? It is important to know who your parents’ key advisors are. Ask them who their CPA, Financial Advisor, and Attorney are. These professionals can provide great assistance when dealing with a death or illness and not having one of these professionals might point to a potential planning area that needs to be addressed.
Still wondering about how to have the “Money Conversation” with your parents please go to our online calendar to set up an appointment.
Michael Tannery CPA, CDFA® AIF®
Tannery & Company
Tax – Accounting – Wealth Management
Be A Financial Olympian™