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Family and Finances: Avoiding “The Talk”? By Rodney A. Brooks Monday, November 8, 2021


For many, two big family holidays are coming up. It may be a perfect time for families to talk about their finances.

It may well be a perfect time for a family finance discussion…but it’s a discussion that parents often avoid having with their grown children.

Having ‘The Talk”

Financial planners say older adults need to discuss finances with their adult children. Adult children also need to review how their parents are doing with their finances.

Adult children often have no idea where their parents are financially until there is a death. That leaves family members in a wild scramble to figurea things out, and at an emotionally difficult time, too. As for the adult children, they need to know their parents’ financial situation before dementia or death strikes.

AWKWARD!!

It’s a discussion that many parents avoid, even when they begin to age. Greg Hammer, president of Hammer Financial Group, Schererville, Indiana, says his clientele is mostly retirees and pre-retirees. “You begin to deal with incapacity issues, which are always tough conversations,” he says.

“It’s not a good thing to not discuss finances with your adult children”

“It’s not a good thing to not discuss finances with your adult children,” says Brooke May, partner at Evans May Wealth in Indianapolis, Indiana. “At any point in time, something could happen, and you want someone to be able to step in, a trusted contact, to be able to step in and assist with whatever your intent is. “The more they’re in the loop and aware of what you have, where you have it, and what your intentions are, the better they’ll be able to assist at the time comes” May points out.”

Why parents avoid family finance talks

But older Americans often avoid discussing finance topics with their families.

“It can be a challenge for some,” says David D’Eredita, founder of Rise Private Wealth Advisors in Tucson, Arizona. “Money is always a sensitive subject, and some just don’t know how to broach it.

“For a lot of people talking about money is taboo”

“For a lot of people talking about money is taboo,” adds May. “And so there just isn’t a comfort level there. But I think the other issue is the potential of losing control over their funds, and they don’t want to.

“They don’t want to give up any ability to make decisions on their behalf. And the more people bought into the loop, the more apt they are to have an opinion or interject themselves if they feel like it’s necessary. It could be just to avoid that potential conversation down the road,” May says.

D’Eredita says he has several clients whose main issue is not necessarily preventing family members from knowing to what they have, but not wanting them to know how much they will get.

“They don’t want their children and maybe children’s spouses and family, knowing or having this mentality, that ‘Well, when mom and dad pass, we’re going to get all this money,'” D’Eredita says. “They don’t want them to behave differently today, because they’re expecting some type of inheritance in the future.”

Expert advice on family finance

  • May says her firm asks all clients, when they enter their 70s, to give them the name of a trusted advisor. “This wouldn’t be a power of attorney, or someone has the authority to act on their account. It’s just someone that we can reach out to if something seems off.”

  • Hammer says he uses a family organizer that his firm helps his clients to create. It contains all the assets regardless of where they are held, filed into one book, he says. It includes key contacts, bank accounts, investment accounts, insurance policies and wills/trusts and passwords.

  • D’Eredita says good communication can help you head off potential problems now. “Organization is key, because it’s a drawn-out process, cleaning up in an estate,” says D’Eredita. “You don’t want it to be a cumbersome, difficult process for one or more of your children. Probate can take months or years – and rack up thousands in attorney’s fees and taxes.”

  • Financial abuse of the elderly is on the rise. Be aware of some of the signs.

  • Does a family financial discussion include wills, estates and charitable giving? Get info here.

By Rodney A. Brooks

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