Everyone is gathered together; the presents are open, and a sumptuous Christmas dinner finished. Younger family members roll their eyes as elder generations recount classic stories.
What is left to discuss?
How about Mom and Dad’s estate plan? That would bring the house down, wouldn’t it?
There’s really no good time to discuss an estate plan with adult children, but it’s not a bad idea to broach the subject during a festive and positive family gathering, especially if the family is typically dispersed all over the country and not often together.
While you don’t have to get into all the details, there are some basics that adult children ought to know, especially if you named them as your personal representative, power of attorney, trustee or health care surrogate in your legal documents.
Knowing Who to Call
The first tidbit they should know is the names and contact information of all your financial professionals, including your attorney, CPA and financial advisor. Scheduling a handshake visit with the attorney when the kids are in town is a good idea, if only to say hello. This makes communication much easier if it becomes necessary in a time of crisis.
Since your CPA is presumably familiar with your income tax issues, it’s good for those that follow you to know who that person is. I’ve had client’s children not know who the CPA is and therefore aren’t aware of what the last three years tax returns looked like when they suddenly became responsible for filing their parents’ returns.
Finances are one of the most sensitive issues between parents and their adult children. An adult child might see investments totaling more than $1 million and wonder why mom and dad haven’t been more generous with gifts. We all know that while $1 million sounds like a lot of money, it doesn’t generate a whole lot of income in today’s low yield environments. And if a retiree spends down their principal, they have no way of replenishing it.
On the other hand, many adult children can be effective stewards and guardians for their aging parents who might become susceptible to investment scams. I’ve heard more than one adult child tell me that if they’d only known what their mom or dad was up to, they’d have been able to step in and avoid financial disasters.
If you have a safety deposit box, now’s the time to let your children know the bank branch and location of the box, along with the location of the key. If you haven’t already put one of your children’s names on the signature card for the box, take them down to the bank and do so. Otherwise, on your death or incapacity the box won’t be accessible.
Online bank and brokerage accounts are becoming more common. If something happens to you it will be important for those that you trust to act for you to know how your accounts can be accessed, including where you might keep a list of your user names and passwords. At the same time, when you change or update your passwords you’ll have to remember to update that list.
Online social media accounts often become problematic, so the username and passwords associated with those accounts should be recorded somewhere secure and your loved ones should know how to find them.
While Normal Rockwell never painted a family holiday scene that included legal documents, bank statements and tax returns strewn about the kitchen table, now might be a good opportunity to have much needed conversations with your loved ones.
On a brighter note, I wish everyone a Merry Christmas and a Happy and Healthy 2019!
© 2018 Craig R. Hersch. Originally published in the Sanibel Island Sun.