Communication Is Key

I have conversations about money all the time, it’s my job. However, I realize that conversations about money aren’t always comfortable or appropriate. On the other hand, some very important financial conversations should take place that often don’t. I’ve seen many different scenarios where a financial conversation would have been very beneficial but didn’t happen for one reason or another. I have encountered a lot of these situations recently and thought I’d share some observations while also encouraging you to think about any conversations that might be good for you to consider having.

The first scenario that comes up often is talking with aging parents. Every family dynamic is different, but it’s not uncommon for adult children to be unaware of their parent's financial situation. A good time to consider having this conversation is when you or they are doing some financial or estate planning. These topics often involve questions related to family finances and often include loved ones as you consider beneficiaries, trustees, and the like. Having these conversations before reaching a crisis or point of necessity is often less stressful for all parties involved. Aging parents may start to feel protective of their finances and their freedoms as they become elderly. Having conversations about finances, and even their independence (i.e. their living situation or driving) can be constructive. It can be very difficult to make decisions when proper planning hasn’t been done or you don’t really know what the individual who needs help would want you to do. Parents don’t need to share all of their financial information with their kids, but there are some important aspects to consider such as:

-          Do they have an estate plan? If so, is it up to date? Know where to locate it and communicate basic information such as who the trustee is.

-          Do they have medical and financial powers of attorney?

-          Do they have financial concerns?

-          What are their preferences as it relates to their living situation if care is needed in the future?

-          Where to find insurance information, including healthcare and long-term care or life insurance if they have it.

-          Any other information they would like you to know.

Other financial conversations that make many people uncomfortable are the topics of life insurance and estate planning. These conversations involve thinking about something most people don’t want to dwell on and that is their death. We know it will happen to all of us and it’s easy to take a head-in-the-sand approach. Though these conversations aren’t a lot of fun, it is much better to make a plan for what would happen to your finances, children, etc., than to leave it to chance and/or let the courts decide. Preparing an estate plan or purchasing life insurance is smart planning and a way of looking out for your loved ones. I’ve spoken with people who would rather avoid the topic altogether as if that will prevent it from happening. Too many times people have been left in very difficult and stressful situations that could have been avoided with a reasonable amount of time and money, rather than potentially taking much longer (often months or even years), adding more stress, and costing a lot more money in the end.

These are just a couple of examples of difficult but meaningful conversations. I believe that the most important thing to remember in these conversations is how they are addressed. It is crucial that those you are talking with understand first and foremost that you want to have the conversation because you care about them, so if a need should ever arise, you can help them in the best way possible and that is in line with their wishes. It may also be important to involve others to make sure everyone involved knows your intentions and feels included. I understand that some dynamics may make these conversations just about impossible, but I would encourage those who feel there is a conversation they should have, to do so, and with a good measure of patience and grace.

If you want to chat about a difficult conversation you’re considering having, feel free to contact me to schedule a time to discuss it, advisor@blakegallion.com.