Do Your Children Know Where Your Assets Are?

Having ‘The Talk’ With Your Children About Your Estate

Speaking with adult children about who will control your assets can be a difficult conversation.  It can cause hurt feelings and breed jealousy amongst family members.  However, the risk of adult children being caught off-guard by their parent’s financial condition, or lack of proper access to it can create significant stress and problems if a parent should die or become incapacitated unexpectedly.

Experienced attorneys know the benefits of having upfront conversations can preempt unwelcome surprises for the children in the future.  When the finances of a parent are revealed only after death, or if dementia hits, the unexpected burden of responsibility to a child can create tremendous stress and problems.  However, life isn’t that simple, and the dynamics of every family unit is different.  For example, disclosing financial information to child battling a substance abuse problem is just asking for trouble.  Similarly, if the child is stuck in a bad marriage or named in an ongoing legal battle, keeping financial information a secret may be a wises decision.  Although there is no one simple answer whether to keep financial information confidential or disclose it, financial experts suggest the following on advice on the matter.

Not Enough Cash for Retirement?

If you don’t have enough money to support you through retirement, it’s best not to make secret of it by hiding it from your children. Time and time again throughout the ages, children have often served as their parents retirement plan, and parents have relied on their own children for financial assistance and support. The sooner you involve your children, the better they can plan to soften the financial impact in their own lives.

Have a Decent Nest Egg?

It might be best not to let the children know of every piece of asset that’s in your name.  The savings you worked hard for over your lifetime may look like an unlimited pot of gold to a young 21-year old; When young adults learn there is a significant amount of money readily accessible, things can go south very quickly.  If you and your partner are young and relatively healthy, it might be prudent that all your children need to know is that you and your partner are financially sound and prepared for retirement.  As you get older and your children inevitably grow up, you can re-evaluate their financial maturity and decide whether they can be trusted with knowing the scope and details of your finances, where its located, and how to access it.

How to Share Financial Information

Every adviser or attorney who has worked with elderly clients or estates say you should make a list of all your assets with account numbers and any other details your heirs or caretakers will need to handle your affairs.  Put that information into an envelope and make sure that your children (or whoever will be your eventual representative) know where it is and can access it. If your information is stored on a computer or online, make sure your eventual representative will have access to the websites and passwords to access your accounts. Keep everything accessible so your assets can be accessed after you’re gone.

Introduce Your Children/ Representative to Your Financial Team

Chances are you have a long-standing relationship with your financial advisor, accountant, and lawyer.  These are the professionals your children will be working with after you’re gone. Having them meet your children before you die or become incapacitated, will facilitate a better working relationship that will likely occur during an undoubtedly sad and stressful time.