Q: My parents are getting older and I’m starting to feel like I need to know more about their situation so I can step in and help if they need it. I don’t even know where to begin. What are some questions I should ask?
A: February is the month of loved ones, roses and, really, the chocolate. We all have those wonderful people in our lives that we want to make sure we can help. Most people, including your parents most likely, are very uncomfortable talking about their personal finances, even with their families. You’re right to want to know more just so they can lean on you if they need.
The key to these conversations is not to be a spy but to have a conversation. If you have a discussion about things and remain open and honest about your situation, a lot of times, your parents will do the same.
Here are just a few things you can talk about:
Trust or Wills in place:
The WRONG way: “Hey, do you have a trust in place?”
The RIGHT way: “I was reading about trust planning and was thinking that maybe I should have one (or I should update ours). Did you ever get a trust (and when did you update it)?
i. If they don’t have one, ask them why they made the decision not to have one. They might say they never got around to it or it just didn’t occur to them they needed one. My Dad told me that only wealthy people needed a trust. He didn’t really know what a trust is because no one educated him.
Things to Consider: A trust really outlines what your parents want for their family and it protects the assets they worked so hard for from creditors.
Conclusion: If they are open, suggest they meet with an estate planning attorney to just learn more
Paperwork and Statements
The WRONG way: “Hey, do you have investment accounts and bank accounts I should know about if anything happens? Where are they?”
The RIGHT way: “I was thinking the other day that if something happened to me, no one would know where my bank accounts are held or where my investments are. I’m going to put things together so that the kids can access it easily and know where it is. How do you have things organized?”
Things to Consider: Many accounts might be listed in the Trust but many aren’t. They have beneficiaries on them and don’t need to be in the trust. Having that paperwork is important because so many accounts are unknown to the family and they have no idea they exist.
i. Also, consider discussing who they put as their beneficiaries. I have a friend whose dad passed away and had left his ex-wife, her step-mother, as the beneficiary. He despised her but the ex-wife got all his money in the end. Make sure beneficiaries are right!
Conclusion: Help them get organized so you make it easier on yourself in the log run.
Trusted Advisors
The WRONG way: “Hey, do you have a Financial Advisor I’ll need to call? Will she talk to me?”
The RIGHT way: “Who do you work with that you trust? Are there people I will need to contact if something happens and you need help? Tax Preparer? Financial Advisor? Attorneys?”
Things to consider: This is probably your most important question. You might not get everything from your parents but if they have a good set of resources then they should be able to help you in a time of need. They can tell you what your parents wanted and any legacy planning they discussed. The estate planning attorney can help you execute the trust so you are not trying to do it on your own. These people can be your best friends during this time and save you hours waiting on 800 calls to find out about things.
i. Maybe ask for their trusted advisors cards and staple them to the paperwork when you are helping them organize their statements
1. Note! Not all trusted advisors know everyone on the team. Be sure to ask for all of their information and don’t just assume the financial advisor or attorney will know who else they use.
Conclusion: Let the super team work for you when you need them.
Those are just a few things out of many that you can discuss with your parents. It’s a good starting point though.
Keep in mind that you are trying to be a value for your parents so try to not to push too hard or get defensive. Remind them that you love them and want to be there for them.
And remember, bringing a box a chocolate can sweeten them up. [Dad joke intended]
We at One Vision Retirement are happy to have a no obligation call to go discuss your situation and questions.
Feel free to schedule a call today: https://calendly.com/onevisionretire/gettingtoknowyou
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Investment advice offered through Integrated Financial Partners, doing business as One Vision Retirement, a registered investment advisor. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Integrated Financial Partners does not provide tax advice or services. Please consult a qualified tax advisor regarding your specific situation