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Our children know we are not your typical retirees when it comes to finances. I’m sure they figured that out from our funding eleven 529 plans, gifts and more often than not, picking up the check when families go out to eat, but that’s all they know.
They have no idea of our income, no knowledge of our investments-what kind, or how much. They, of course, know we own two homes, but not our net worth.
So, the question is, how much detail do we share, who do we share it with and how? There are four children. We have a good relationship with all four. One family is wealthy, one struggles and two do okay.
Do we have a family meeting with all four, give details to the executors who will handle our estate or pick one? Do we share every detail, every dollar and where it is? I should mention our son-in-law is a Wall Street, high net worth client manager.
Let’s have HD ideas.
I can only speak for my own unique experience, but I totally disagree with those who want to keep their children in the dark.
I was a singleton in a hard-working but very poor family in my first years. A formative experience was seeing an old truck repossessed, and the failure of a small family business.
My parents never hid any of this reality from me, even at age 4 or 5. Life was tough, we would be frugal, but we would make it. Gradually my parents did climb out of their hole, and then each received modest inheritances, mostly in the form of stocks and some bonds. They had learned from their parents frugality, patience, faith, and hope. From the beginning, I was invited to review with them their investments, and understand their rationale for what actions they took, good or bad in retrospect. Because they made few expensive mistakes, and quickly understood that fees and costs matter, they got rich slowly. Meanwhile, I was absorbing their lessons. They gave me a few thousand to invest, which I did invest after considerable study. I learned more from my mistakes than my successes, but it was a cheap education.
My parents gradually needed more and more care because of emphysema, COPD, and heart disease, and I arranged my life to be able to help, at the drop of a hat. I was the junior partner in the family firm, and I damn sure was going to do whatever was necessary.
Ultimately, of course, they both died, and they left me a modest inheritance but far more valuable a philosophy of money and investing–Jonathan before Jonathan–and I have thrived ever since.
Because they had shared and explained everything from the earliest days, I learned about thrift, the amazing and frightening power of compounding, and how to maintain a calmness of mind, whatever the market did in the short term. When my father died, I felt fully competent to deal with what he left me, and the results suggest I was right. I am forever grateful for the trust and confidence my parents put in me, from young childhood, and I believe I repaid that well over their lifetimes.
My message: be frank with you children. In my family it was literally unthinkable that my mother or father would be in the dark about family finances, and naturally I gradually became the junior partner, so to speak, in the family firm.
I urge you to share, RDQ, with all four of your children. I suspect it will remove a huge, perhaps subconscious, load from your shoulders.
My father began sharing his financial information with me, an only child, when I was in my 20s. Then, I hated it, as he reviewed his accounts and investment deliberations in great detail; I barely had the patience to listen. I also never counted on inheriting (the step family situation was fluid), and these talks did not alter my savings path.
Over time, I grew to respect my father for sharing. I learned much, too. As his eventual executor, my understanding of his finances made my work that much easier. I already had a checklist. And the best part was that my father asked what I would do were I to inherit. We spoke of philanthropy and it pleased him to know that his money would be put to good use. He passed two decades ago, but I feel him with me to this day as I realize my giving plans.
Being an only child, my parent’s estate was very simple. I had helped my dad realize he needed a will and directed him to a good attorney to prepare it. I have helped my relatives get their wills and assets in order. It made things so much easier. As far as disclosure of dollars in accounts, I am ambivalent. I knew my parent’s financials. I helped one relative set up his estate to pass to his son. His son chose not to know the details. He just did not emotionally want to deal with it. I was with the son after his dad’s passing. I walked him through the steps to take in the days after the funeral. Step one…call the estate attorney. It worked out OK not to know the details.
Do we have a family meeting with all four, give details to the executors who will handle our estate or pick one? YES! Do we share every detail, every dollar and where it is? YES!
Sir, you’re in your 80s. The time is now.
Perhaps you are asking the wrong question……Rather than framing this as how much information to share and with which of your children, consider the purpose of such sharing first.
Several years ago when my spouse was first diagnosed with dementia, while I had my own health concerns, it became obvious to me that if I became unable to manage our finances, even temporarily, we would need someone immediately prepared to step into my shoes and carry on our affairs. This is a different problem than merely dealing with an estate after both parents have died.
Whoever filled this role would have to be read-in on everything, and would have to be able to use my phone, IPad, and PC as if I was doing the work. They would have to understand how we were financing and paying substantial sums for memory care. They would need in depth understanding of our plans.
Earlier in your retirement, while both of you are hale and hearty, and the path ahead seems endless, thoughts about keeping knowledge of your finances private might be okay.
From reading the responses to this Forum post, there are some of you who are as prepared as I am. That is good. Those of you who have an uninterested spouse and don’t have detailed plans might consider how your bills would be paid if you fell and broke your hip? Once the ambulance delivered you to the hospital, you are going to be out of action for quite a while..What will your spouse do?
I am fortunate to have two sons both of whom could do this. I asked them to discuss the situation with each other and decide who wanted to do it. The one who didn’t would then have to handle our estate. Both of these roles are very important, and both will take some of their valuable time to handle. After they decided who would do what, we had our documents redone and took steps to get the one doing the quick replacement tasks equipped with what he would need to do the job.
If one or more of your children wouldn’t be up to doing the work, you have to be tough minded enough to exclude them from consideration. After all, dealing with your immediate finances isn’t a question of fairness between how children are treated.
My parents are in their late 70s and we are in our mid fifties. I made our parents prepare wills and POAs. I told them I don’t need to be guessing about their wishes and my job was to execute exactly as they wanted. My sister lives in England and she told them she trusts me to handle things. We both are ok financially and anything we inherit from our parents is gravy in the biscuit. I was clear with my parents that if they left me a mess to figure out, I’d let it all go the state, so have a freaking plan! Got the estate planning done post haste. Now, its a non issue.
Hi, as a widow I struggle with this topic as well with 3 unmarried young adult children (late 20s/early 30s) in different cities, with various job histories/prospects and with diverse administrative skills/interest. When my husband died 8 years ago at 62, it was impossible for them to even consider next steps were I to pass away. There is a fine line to let them know there will be substantial assets, and that there are also multiple steps to manage an estate transition smoothly.
I’ve completed estate planning with all relevant documents in place and location of consolidated accounts at Vanguard. I update an ongoing letter of instructions (9 pages replete with humor – I hope- and an appeal to keep saving for decades ahead). And still so many details to consider – for example, I took an extension to file my tax forms in October (paid in April). With a recent trip out of town I realized they would have no clue that this form still needed to be filed. It’s in my head. Another topic for the letter…
Dick –
I don’t think adult children need every dollar amount, account balance, or net worth figure before there’s a reason. But they do need enough information so they’re not left guessing, fighting, or digging through drawers someday.
I’d separate this into two conversations. With all four children, share the process: you have an estate plan, key documents are in place, and the right people know where things are. With the executor or successor trustee, share the details: accounts, contacts, passwords/access instructions, attorneys, CPA, and your wishes.
I’d be cautious about a full family net-worth reveal, especially when the children are in different financial positions. Money can change expectations, even in good families. I’ve seen it first hand.
The son-in-law’s financial background may be helpful, but I wouldn’t make him central unless that also fits the family dynamics.
My rule would be share enough to make the transition clean, but not so much that it changes the relationships while you’re still living. The real question is: are you trying to prepare them, or are you hoping the information will make them feel something about your success, fairness, or generosity?
JMO – Jeff
My parents, who are in their mid-eighties, never shared anything about their finances. We knew my father had a decent pension, my mother had a miniscule pension from a part-time job, and they got whatever the Irish system pays out to OAPs (Old-age pensioners).
We also knew that the house they paid $8000 for in 1973 was long paid off, so if they really needed money, it was there.
This year, a series of health incidents has left them barely able to manage alone. My brother and sister have had to deal with a lot of paperwork to get power of attorney set up, manage medical bills, and figure out how to make the house more livable for them.
We don’t see them being able to stay in the house. Luckily, the Irish system will pay for them to move into assisted living by taking 21% of the value of their house as compensation. The break even point for that would only be three years, so we think it’s a better option than selling the house, which they don’t want to do anyway. The 21% due to the government is only paid when the estate is settled.
It would have been a lot easier to get through all this if they had shared information in the past. With my mother in rehab and my father with dementia, tracking down all the necessary paperwork took months.
If nothing else, at least provide a list of accounts and where they are. And where your POA’s are.
I fully agree the children should know the where and how regarding wills, insurance, where investments are held, who to call or contact for various things, but I’m not convinced they need to know dollar amounts. The one exception in my mind is if there is a potential issue with adequate survivor income or even potentially LTC expenses.
Although I have no factual reason to expect this, I have in the back of my mind they (or their spouses) may act differently in their financial lives now if they know there will be substantial inheritance in the future.
Since my wife died several years ago, I have a difference in the who and why my assets will transfer. I sit down with my chidren and told them my daughter will be the executor and all of the directions are in a letter to them containtng the who, what, when, where, and why of my finances, Currently, it is 38 pages long, my will is 5 pages. While they know where the documents are located, they do not have access.
The kids do not know dollar amounts and details, but they do understand what they recieve will be controlled by beneficiary designations, my will and trust documents. My daughter will have few decisions, just lots of managment. My discussion with the kids renews each year around Christmas, just to give an update and answer any questions.
Money is a very personal thing and you need to do what you feel is correct for you and yours, but understand that they already have a fairly close idea of what you have already. Not sure I agree that they may act differently, I feel you raised them right and based on your generous contributions to their children’s account over the years, owning 2 homes, etc… they know to expect a fairly generous inheritance. I don’t think that knowing the amount is going to make a difference and it is not what I would do, but there is no wrong answer to this question.
I completely agree with this take. We have made sure that a couple of family members have the contact information for our estate attorney and the local fiduciary whom we’ve named as our executor and trustee. We’ve told our daughters that we have planned for our old age such that they will never have to worry about us financially. That’s as much as they need to know.
That’s what we have told our children. They may have to worry about us, maybe help us someday, but it won’t be financially related.
Frankly, I’m not sure which is the greatest burden for children and for some people it’s both.
I have one 20-year-old child, who is unmarried, so our family situation is different. Even so, we have shared all information with her except for an account that holds money for her wedding, house down payment, and so on.
I agree with Dan Smith under Marilyn Lavin’s comment–the actual dollar amounts are not crucial, but all else should be readily accessible. And, as you age, it would be wise to have another set of eyes on the money management, just to make sure. I would limit this oversight to just one trusted person.
Great prompt for responses! My parents are both in their 90’s and my wife’s parents are both deceased. It was only within the last year that I was offered to take a look at the binder of financial information which my dad maintains.
I share an up to date document titled “Time’s Up” with my wife which provides information about all our accounts, assets, debts, etc., and my wife has the master password to my password keeper. I think the title of the document is funnier than my wife does…
My wife takes only a minimal interest at our financial picture, and I would like her to have a better understanding of that information prior to sharing with our daughter and son, both in their 40’s. That would allow us to make sure we’re on the same page with our finances. If I can get her to understand our finances, then I would like to find a time to meet with the 3 of them together to discuss.
FYI, I will gladly accept suggestions for how to enhance her interest in our finances!
My husband doesn’t care about money, and was very willing to hand over responsibility to me. I did it all for decades, but then I realized the problem being created by his ignorance of our finances. I have one friend who had major problems after her husband’s death; she has two great children but each was dealing with life-threatening illness. I told my husband I was no longer empowering his learned helplessness. Yes, we’re still married!! But it is important to realize both partners have responsibility for the situation where one isn’t interested in finances. And it also means the one who worked with the money, has to give up some control. I wouldn’t say my husband is a money whiz, but he’s definitely getting better,
My wife is the same way. No interest beyond the balance in her checking account.
You have a responsibility to change that attitude. And it IS up to you.
The last time I commented on this topic in response to another post about this topic, I received negative reactions to my comments. But here I go again.
We have never shared information about our income or net worth with either of our daughters — not while we were working and not since we retired in 2017.
When, during middle school and high school, our daughters asked if we could afford something, my wife’s standard answer was that yes, we could.
This is the third consecutive year in which we have made substantial monetary gifts to each of them. We have explained that the gifts are partial pre-payments of what they will eventually inherit. Our stated reason for the timing of the gifts is that it makes sense to give them money now when they may need it more, rather than for them to receive everything when we pass. Each daughter asked if we could afford these gifts without jeopardizing our retirement finances, and we answered that yes, we could.
At some future date, we will change course and share more information, but we see no need to do that yet.
Ultimately, each family has to handle this topic as it sees fit and in a way consistent with that family’s history.
Good point
Gary, I agree wholeheartedly that each family must find it’s own way on this issue. My parents are both in the late seventies, I know nothing of their finances other than the fact that they are comfortable. And that’s ok by me.
Greg, I appreciate your perspective of the adult children. As I sit here having breakfast with my younger daughter (39) and one of my grandchildren, that’s exactly the perspective that she has and I’m fine with that!
And Gary, I’m sorry that your prior comments on a similar topic were received with negative reactions. I had stopped posting here for quite a while due to a negative tone by many readers. It seems to have gotten more civil of late.
We have 2 solidly middle class successful kids. My son the math wiz and I share everything related to our finances. I’m a bit older than my wife,along with the fact she has incredible longevity in her family and I expect her to outlive me. I want him to be able to help my wife with decisions if and when she needs. He needs to know. I have no secrets to hide.The more they know the better.
We have two daughters, one with some intellectual disabilities and poor money management skills. Knowing that a sum of money would come to her one day would lead to either (1) never saving a single cent, knowing that one day money would just land in her lap, and/or (2) insisting that the funds be handed over now! I like the principle of being open about your finances with your kids, but I think there can be some circumstances where it’s counterproductive.
For now we provide relatively small, ongoing support to both daughters and ensure our wills and all our financial affairs are in good shape and easy to navigate. This will probably change over time, but it feels right for now.
We’re in a very similar situation, Greg. Under no circumstances do I want our younger daughter (especially) knowing how much money we have and how much might eventually come her way. We’ve even structured our trust such that it will be distributed incrementally over decades, with the last of it coming when she turns 60. She doesn’t know that and probably won’t know until we’re gone. This is also why our trustee is a fiduciary and not a family member.
We are currently revising our wills to a very similar structure. Some funds will be distributed initially, but after that it will be a yearly distribution. We really struggled with how to best set this all up. We’re still not sure, but I think it’s somewhere around the right mark.
We have always shared our net worth and investable assets with our boys since they were in their 20’s. One is a PA and the other finishing up on becoming an electrician and are co-executors of our estate.
They know where our wills and all other relative forms are, also our main password for our password manager to get into all of our accounts ( over 160 right now ). We sort of keep them updated throughout the year, but know the only thing they have to remember is all this is in our SDB, which they both have access to.
And we keep them informed of any major changes such as us taking SS in 3 and 11 years respectively. I’ve seen and heard too many horror stories from people who have been executors and not even knowing where to start when a loved one passes,and don’t want them having to go through it themselves.
We have substantial retirement accounts that will pay out fairly quickly upon our deaths, so we have let everyone know the approximate value of just the retirement accounts and the portion they will receive, and how long they can expect to wait for settlement. They also have been sent information about required disbursement which would impact their own tax situation. In each case the amount of money we are talking about would easily replace salaries for a couple for the 10 years of draw down.
However, the vast majority of our funds are going to be more complex and require more time to roll out as they are (will be) in trusts for the different parties, mostly to protect from unexpected divorces, lawsuits, etc. So those amounts we have told only our executors about. We hope it will be a nice surprise, it will essentially provide a very comfortable immediate retirement, but because it may take 1-2 years for payments to begin as the estate settles, we are comfortable keeping the amounts under wraps while providing security with the retirement funds they will receive much sooner.
I periodically share our Quicken net worth statement with our three sons. The oldest is our executor so he knows our logistical details. All three know where the passwords are.
I’m gaining a daughter soon through marriage. Fortunately her folks are very comfortable so all green lights for the newlyweds–they both are debt free out of the gate.
As Jonathan often mentioned, since he could have family members be a financial backstop he could afford to be more heavily invested in the stock market. I hope our children feel the same way. The youngest has the highest earnings so far and has always been in the market since being a teen.
I aim to start giving higher value cash gifts for birthdays and Christmas–I’ll be shedding some of my “skin-flinty” ways. Our favorite charities have always been top of mind. We’ve been retired for a few years and besides hefty health insurance premiums, we’re enjoying a good financial groove.
We took Marilyn’s approach, and shared everything with the kids. I did this well before I turned 70. I have shared before that one son-in-law is a successful financial advisor, and the other an estate attorney, so both have reviewed all details of our planning.
Your post has reminded me that I should review our letters of instruction regarding things like online account access. Chrissy knows how to do those things, but if we were eaten by the same shark, the kids may have some difficulty.
I should add, everyone’s family dynamic is different. There may be valid reasons not to share certain details.
Did you see any unexpected reaction or different reactions between them.
I did not. Both families do pretty well on their own so neither is concerned about any inheritance. They both encourage us to spend more money.
I recall a widowed client who had two kids that were 180 degrees different when it came to money. She lived with the responsible son, who knew about her assets, she was fearful to share the details with his brother. I thought that a trust might make sense, and that she should meet with an estate attorney. I do not know if she ever did.
I think it’s well past the time you shared everything. When you and your wife are in your 80s, things can change rapidly. It’s unfair to leave the kids unprepared.
We did it with all children— not spouses—present. We basically told them everything. Pensions— they would inherit if both of us don’t live to 87– investments, savings, 529, and cds, real estate, etc. They also have copies of our wills, and were asked if they had suggestions for changes. They know everything— how much and where it is. They also know how we spend— for example, when our real estate taxes are due on our houses.. Who knows when they might have to take over.
I admit getting the kids to agree to the meeting wasn’t easy. They claimed it wasn’t necessary. It was.
I have given them a final instructions letter about where to find everything, documents, insurance, etc. just not dollar amounts and details of investments
That is possibly more important than the actual numbers.
Richard, have you considered a multi-pronged approach?
Start with a family meeting where you share your outlook on money, explain why your portfolio is structured the way it is, and outline how you’d like the estate plan to look. You could give everyone a broad sense of the numbers involved, keeping it high level, so the whole family has a feel for what lies ahead.
From there, you could select one of your children as executor and bring them into a deeper conversation. Share the more detailed financial information and specific guidance on how you’d like things handled.
That way, everyone gets a solid overall picture of the plan, while the person you trust to carry it out has the full understanding needed to do so properly.
Two of our chikdren are our executors, so maybe that’s where to start.
You really want a situation where some know and others don’t? I think that could lead to real family problems down the road. My mother shared her finances with me, but not my brother. It wasn’t good after her death.
Good point, I don’t want to do that.