Financial Planning: Family Style

KEY TAKEAWAYS:

  • Be proactive about discussing financial, estate, and health matters with your parents and children.
  • Stress and emotions take a toll on families when something tragic happens to a loved one.
  • When complex financial matters are added to the equation, the situation can seem overwhelming – especially when a relative comes into the situation unprepared.
  • Keep the location of your assets, will, and key financial documents and who your advisors are handy and up to date.

The holiday season is one of my favorite times of the year. It’s great seeing family and friends, celebrating together, and giving thanks for everything that we have. Although the holidays can be hectic, it’s an opportune time to take stock of your life and to evaluate your overall planning goals for the next year and for years to come.

The holidays are also an excellent time of year to have thoughtful discussions about your goals, estate, and other wishes with those who are closest to you. Sure, discussing money with parents and children can be difficult, since most of us don’t enjoy talking about estate planning, financial matters, health concerns, and of course, death. But, failing to have these discussions will eventually make things very difficult for surviving family members if you and/or your spouse suddenly pass away or become incapacitated.

TAKE IT FROM ME

Even though I’m a financial advisor, it’s been quite a while since I sat down with my mom and went over her financial situation. It’s not always pleasant, but this year I am going to make it a priority to review Mom’s estate, will, and wishes with her. We’re also going to make sure we nail down the location of her financial documents, wills, and accounts—all of them!

Now let’s turn the tables. My son is a senior in college and my daughter is a freshman. It’s hard to believe, but they’re officially young adults. It’s time that I went over some key information with them, including where my wife and I have our will, where all of our investments and assets are held, and who my kids should contact in case of an emergency, death or disability to my wife and/or I. As my two children continue to mature, I will consider adding them as executors, trustees, and powers of attorney for our estate.

When evaluating your own or your parent’s financial situation, there are seven key considerations to keep top of mind:

  1. Ensure that your will is up to date. If your will is over five years old, it may be time for a check-up.
  2. Ensure that your executors, trustees, and beneficiaries, as documented in your will, are accurate. NOTE: These responsibilities may change as people age or health declines.
  3. Prepare a detailed list of your investment and bank accounts. If you don’t, it can be very difficult for those in charge of your accounts to locate and access them after you’re gone.
  4. Make sure both spouses know where account logins and passwords are saved. Password managers such as Dashlane are great for securing your passwords and for making them accessible to both spouses.
  5. Make sure your executors and powers of attorney know where your will and key financial documents are located and which advisors they should contact.
  6. Address health or cognitive issues as soon as you can. Develop a plan with family, healthcare providers, and advisors.
  7. If appropriate and timely, consider reviewing your financial matters and estate in detail with children and/or parents.

When something tragic happens to a loved one, it can be an extremely emotional and stressful time for your family. Add in the complexity of estate and financial matters, especially when a relative is coming into the situation blind, it can become overwhelming. It’s essential that your estate and financial matters are properly structured, that your assets are documented, and that your key executors and beneficiaries are informed.

CONNECT WITH EXPERTS

At Soundmark, we surround ourselves with professionals and a wide range of technical experts to provide advanced solutions to our clients. When it comes to wills and trusts, we can connect you with an attorney who will ensure that your will is properly structured. The estate planning attorney will communicate with us regularly to make sure that your estate is properly administered.

 

Todd Flynn, CPA, CFP® is a Principal at Soundmark Wealth Management, LLC. Todd works closely with physicians, business owners, and other successful and accomplished individuals to help them define their financial goals and implement an ongoing financial planning process.