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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.
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.
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
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.