Children: Time for a Family Meeting! (Part One)
A proverb of anonymous origin observes, “Only three things in life are certain: birth, death, and change.”
If you have lost a loved one, you have experienced the devastating reality that everyone in our life will one day pass away. Often, the children are the ones who have to handle financial responsibilities during the grieving process.
Generally people do not discuss death and finances. Planning in advance for the tasks that will need to be done can make that difficult time a little less stressful.
There are two benefits to having a discussion with your parents – 1. It is important to have some idea of what you are facing after a loved one becomes incapacitated or passes away; and 2. Having this discussion lets your family know you are interested, you care, and you are here to help.
Why have these hard conversations?
If there are not documented plans for your parents’ finances in the event of death or incapacity, you can end up in debt or short on cash as a result of helping your parent.
If your parents become too sick to manage their finances and you have not been given access to their accounts in the case of incapacity, bills still need to be paid but you will be unable to access your parents’ money without court approval – which can be a lengthy and expensive process.
Without documented authority you would be unable to use your parents’ money to pay for their skilled nursing or assisted living, or even a funeral. Care can cost thousands of dollars and funeral homes will not provide services without cash up front. You may have to pay these costs out of your own pocket until everything is sorted out with the court, resulting in you taking on debt to cover expenses for your parents.
Additionally, if you do not have a general idea of what financial accounts your parents have, it will be very difficult to gather assets to pay for care or to be distributed after their deaths.
It is unlikely that your parents’ true wishes will be fulfilled if they have not shared what those wishes are. For example, families may end up planning and paying for a much more extravagant funeral than the decedent would have wished for, meaning unnecessary expense and stress.
What you are having is a planning and preparation conversation – there is no need to bring up the actual numbers or ask how much are in various financial accounts. Rather, knowing what accounts and assets exist, and how you can help in the event of incapacity or death should be the goal.
How should you begin this conversation?
Keep sensitivity and respect in the forefront of your mind. Many people feel uncomfortable talking about their finances, let alone talking about both that and death.
One approach could be referencing past experiences your parents or their friends may have already had surrounding funerals, managing their own parents’ deaths, and with handling end-of-life care for loved ones. If their parent kept their will and estate planning documents up-to-date and easy to find, that is an excellent example to follow. If their parents had finances that were messy and disorganized, remembering the stress that resulted from this might encourage them to get their finances in order.
Alternatively, if you’ve read articles or learned about end-of-life planning topics on your own or are making arrangements for yourself, talk to your parents about that topic and ask for their point of view.
Next week we will discuss the various documents that you should discuss with your parents surrounding estate planning.
