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My husband and I are in our early 70s and have been retired for 5+ years. Our net worth is significant and we are fortunate to have a generous retirement income and lifestyle. Our adult children are in their 40s, have good incomes and various retirement benefits. Is there a good, better, best time and way to share our estate plans, net worth or other details about our future plans with your adult children?
It vert much depends on the circumstances, and the kids.
I am the only one in our family who has any interest in finances. My folks had a rag tag collection of stocks ( inherited from their parents) with cost basis in one case in the pennies. They never sold much but fortunately they had a great pension. They never told me much, other than giving me POA over their accounts when they were over ninety, so I knew where things stood. It didnt take long to sort things out, other than one gotcha that could have been prevented if my parents had told us about large gift they had made.
Neither of our kids is interested either. One has limited financial needs which she can easily meet if she continues to work, now we have helped her buy a house, which we freely disclosed. The other kids spouse’s family is very well off and helped with their house. We have told them we will be gifting them stock irregularly, but some years maybe not.
We try to keep things even but dont feel any compulsion to compete with the other-in-laws, and if we died tomorrow, one kid would be well ahead in gifts from us, but the other still has more assets.
So the bottom line is we disclose the basics, tell them we will be fair, but they know and accept that we are not trying to be 50/50.
It helps a lot that both kids like each other and talk a lot and that the new spouse adores her sister-in-law and vice versa. If there were already major conflicts, we would have to have a different plan I guess.
Appreciate your input, my one son has similar support from his in laws, fair is a good approach, fortunately my kids like each other
One daughter was mid 30 and the other late 20s when I gave them a copy of my will. Now both in their 40s I have shared everything with them. I’m on my second marriage so I think it’s important to understand how our estates will be divided. There is also a letter explaining our rationale for TOD and POD designations, and also where to find documents and passwords. We are fortunate to not have any trust issues with any of our beneficiaries.
My involvement in my family’s estate planning is likely not the norm, but I eventually came away with an appreciation of the process. I hope this offspring-side view can be useful to you, Jane. I suggest sharing early and often with your adult children, to the point where the discussions become casual and routine.
As a teen and only child, I sat at the table with my parents as they constructed their will and planned their last wishes. My mother died unexpectedly a few years later and my father began introducing me to his financial affairs. Then, I would have rather been anywhere else than in a financial discourse. Gradually the information seeped in though and the conversations became two-way. My competence with financial matters grew as did my confidence. I had a key to my father’s safe, copies of his insurance policies, and all his legal documents. Beginning in his 50’s and until an Alzheimer’s diagnosis in his late 70’s, my father updated me annually with his account summaries and tax returns.
Having so much financial information helped me to navigate step-family dynamics upon my father’s death and to be his executor. I was grateful for that help but do wish we had openly discussed finances with my step-mother; she was largely uninformed about his estate plans until his dementia set in. Feeling torn, I wished to honor my father’s initial intentions but also to do the right thing for her. In the end, I opted for the latter and we divided the estate equitably.
Sadly, this assumes we can trust our family. We fortunately can.
But many years ago my grandmother shared her info with rhe family and put me in charge of her finances. My uncle started pressing me for advances on his inheritance. He claimed it was his money and he needed it immediately. I was firm that it was her money, not his, and that it would not be financially wise to give away any of it when we didn’t know what her expenses would be. He hated that his money might be spent on her care. He had no regard that she had zero after the 1929 crash and that she and my grandfather made all the money they had themselves. He insisted he deserved the money, but except for his deluded perception that he should be compensated for psychological distress, there was no justification. He would have taken my mom’s share of the estate too if he had been given any latitude. He was also furious after his mom died that he didn’t get a penny until probate was completed (about two months) and it took so long to sell the house, but then that we sold it for too little.
Just an example, I agree family needs to know, but make sure somebody trustworthy who won’t be swayed by pushy people is in charge.
I was visiting a son and family and a granddaughter age 13 started bad mouthing millionaires. How do you know a millionaire I asked. They look and act different, they have Botox and stuff like that.
Do you know any millionaires I asked. Of course not she said. She was sure she didn’t.
A recent study says there are 24.5 million millionaires in the US
Some “millionaires” are pretty normal 😎
I worked in the investment business for 42 years and frequently spoke to clients about this question. Sadly, many parents did not want to discuss either their estate plan or financial situation with their children as they were worried that: 1) their children would be disincented to work, and/or 2) would try to take advantage of them. In many cases, their concerns were justified.
For other parents, it was mostly a matter of privacy, but I tried to convince them that telling their children about their plans and resources while they were still able was a good idea. Their kids needed to know who would be in charge upon incapacity or death, and it would be a chance for children to ask questions that can’t be answered after their parents are gone. That said, such a conversation is not about gaining the approval of children as the money belongs to the parents and its entirely their decision as to how its to be used and/or distributed.
Is there a “right time” for such a discussion? The best I can offer is that “it depends.” Children need to be old enough to participate in such a discussion and parents need to either have made an estate plan, or have a clear vision of what they have in mind. On the other hand, such a discussion should not be left too late, especially if only one child, or a non-family member, will be in charge when parents are no longer able to act for themselves.
Discussing incapacity, death and inheritance is always going to be an emotional discussion, but it needs to done wherever possible in order to help avoid the surprises, disappointment and conflict that may otherwise occur later.
thanks for sharing, especially appreciate the discussion is not for their approval
one addendum is having a person..lawyer, estate para-legal, or others on tap when they they need to access all the t’s crossed and i’s dotted…
i was my mom’s executor and having help was invaluable…have them know where they can get advice..perhaps from the people that put together the will and/or trusts..
and simplify ;->
simplify and have somewhere they can go for help when the time comes. Agree 100%.
Starting about one and one half years ago we began sharing all of our financial information with our only child, who turned eighteen six months ago. The last piece was the money in our 529 account, because we didn’t want to curb her efforts toward college scholarships. We used the opportunity to further her financial education and hopefully help her to see what is already in place for us and her, as a foundation for her view of her future.
I recommend providing children with at least an executive summary of estate matters once they reach adulthood.
Our two children are in their 20’s while we are 68, and they already know the big-picture of our estate – there is more than enough for our needs, our financial assets are mostly in tax deferred accounts, and we are Roth converting – possibly as a safety net for their Mother’s care at 100 but more likely for their inheritance. While we have not provided exact figures, estate communication can help children in their life’s planning.
For example, we encouraged both professionally employed children to step up in their house purchases and pull back a bit in their excessive 401(k) savings rates. They understand they will likely have a future backstop in mid-life which provides them comfort to stretch on housing now.
It likely depends on their maturity and financial acumen. We did it in phases, with an interesting start point. It began with my helping our kids do their taxes in their mid 20’s, and explaining nuances in how savings could be legally sheltered to be taxed later. I shared some of our own info to use as examples. Each year, as their taxes became a bit more complex, I would share more. Over time, they got the whole picture of our net worth.
Exactly! I need to hear one of my kids tell me what he and his wife are doing to plan for a financial future. The other one will be fine even if he inherits nothing from me.
Jane, the most important thing is to make sure your estate is well organized, documented, and accessible by your children. You can disclose the information in phases if that makes it easier for you and your husband. I wish you and your husband health and many years of happiness. But we all know things can change in a blink, especially as we age.
If your adult children are in their 40s, I think the time has arrived. In fact, I’d encourage you to have multiple conversations because the details are unlikely to sink in the first time, plus your children will likely have followup questions. In the past, I’ve alerted my two kids every time I’ve drawn up a new will or made another estate-planning change. Two days after my cancer diagnosis, I sat down with the kids, my son-in-law and Elaine, and we had a discussion about my estate and what they’ll inherit, and I subsequently had further conversations to clarify matters. We’ll likely have another “fire drill” at some point in the months ahead.
Appreciate the sound advice. Many subjects including money and estate planning were not discussed with our parents. After closing our parents estates, we realize that it can lead to misunderstandings and hard feelings.
As always, you show us the responsible way to handle our finances.
I struggle with this. I want them to know where and how and how to access or help their mother, but not sure about exact amounts except insurance.