Talking to adult children about your personal finances and estate strategy may not be easy, but it is important. You don’t have to disclose exact facts and figures. But generally discussing your finances with your grown children and introducing them to your financial professional can better prepare the whole family for the future.
Assets and Debts
Sharing information about assets, income, expenses, and debts may be especially difficult. If you’re reluctant to give specifics, consider writing a letter of instruction as part of your estate planning strategy. The letter can include your financial and retirement account numbers and locations, along with PINs and passwords for online accounts. Keep the letter with your will.
Insurance
Your personal representative (executor) needs to know the policy number(s) and location of any insurance policies on your life. Make sure you store policies somewhere safe and easily accessible. You don’t want your family to go without needed funds because they can’t locate your insurance policy. Also go over any other insurance coverage you may have — health and disability income, for instance.
Estate Documents
Discuss your general estate planning strategy with your adult children, making sure they understand your wishes and the purpose of the various documents. Give them your estate attorney’s contact information.
Have you named an adult child as the personal representative (executor) for your estate? You and your attorney should go over the responsibilities of the job with that family member. It’s possible the child might not want to serve and you’ll need to choose someone else. Similarly, if you’ve chosen an adult child as a trustee or co-trustee of a trust that’s part of your estate strategy, discuss the terms of the trust with that child.
Copies of health care directives, such as a health care proxy, should be given to the person you’re authorizing to make health care decisions on your behalf if you’re unable to do so yourself.
Article contributed by
Nate Cultice CFP, FSA of Castle Wealth Planning
