Should you share your financial information with your children?
It’s not uncommon for people to keep their finances secret from their children, even their adult children. They rarely share how much money they make, how much they tuck away to savings, or how much they spend in a year. However, most attorneys and financial advisors will tell you that this isn’t the best choice. Failing to tell your adult children about your financial affairs risks them being caught without access to your funds and without the information they need to be able to handle things for you if there were to be a tragedy. The risk of your children doing something to risk your financial stability is also, in most cases, fairly low. If you wait to reveal your finances only after dementia or death strikes, this can place a lot of responsibility and stress on your child. However, there are good reasons not to tell them too. For example, if you have a troubled or immature child, they could try to misuse your funds or convince you to hand over assets to them now that you could need later on. Unfortunately, there isn’t one formula for helping you know when to share your finances with your children, but there are a few sensible guidelines to help you with the matter: Share shortages sooner than later. If you think you won’t have enough money to get you through retirement, let your kids know. You may end up needing their assistance, and there is no shame in that. Family members have helped other family members for centuries, and the earlier you involve your kids, the more likely they will be able to help you find the resources you need and plan for the future. Wait on the bigger numbers. While you may realize that you have just enough money to pay for long-term care and your 25-year retirement, that can still seem like a lot of money to a 23-year-old. If you have a spouse and are healthy, wait until later on to reveal specific numbers if you would feel more comfortable. However, if you are struggling with your health or getting up there in age, it’s a good idea to allow your kids to know how to access your money and where it is.
Find a middle ground. Make a list of your assets including account numbers and other details that can be given to your heirs if they need to handle your affairs. Put that information in a safe place and let your children know where it is and how they can get to it. If you save the information on your computer, be sure they know the passwords needed to get the information if they need to. Gather the kids to have a family meeting. When you are ready to talk about your affairs, consider calling a family meeting with all of your kids present. This is particularly important if you don’t plan to give everyone equal information and responsibility. This will allow those that don’t get the same treatment to be assured that you love them just as much and explain why others have been given certain responsibilities. Introduce the family to your advisor. It is also a good idea to introduce your family members to your financial advisor or estate planning attorney if you have one. They can help explain your situation and your plans for the future. In Conclusion Talking to your children about your end-of-life financial plan isn’t likely to ever be easy. Whatever you decide to do, it is vital that you have your financial affairs and end of life choices known. Your estate planning or elder law attorney can help advise you of your options. We specialize in educating and helping you protect what you have for the people you love the most. Contact us to learn more about how we can help you and your family.