The greatest gift a parent might ever give to their kids is peace of mind. One major way to give that to your children is to prepare your finances and estate plan today, so your children don’t have to worry about unwinding your estate plan down the road. It’s important to take care of these details while you’re capable of doing so.

Admittedly, family finances are an emotionally charged topic. That is why we recommend working with a trusted Financial Advisor, who can provide you with objective, knowledgeable input.

For many families, finances are rarely discussed in detail, even as children mature into adulthood. However, it’s important to prepare your children so they can carry out your estate plan as you age, just in case you become less capable of managing such tasks. Preparing now is easier on everyone, prevents financial disasters down the road, and grants you and your children peace of mind.

Here are some tips on how to prepare your finances now, to benefit your children later:

 

Gift Your Children Peace of Mind

By taking care of your financial and estate planning, you can gift your children something invaluable: peace of mind. It allows your financial discussions with your children to take on a much more positive tone: “We’ve worked with our financial planning professionals to ensure our needs in life our covered, so you’ll never have to worry about that.” By supplying your children with the name of your Financial Advisor and the location of all your important documents, you’re preparing them for a much more seamless future.

This is an area where a trusted Financial Advisor can offer real value. They can provide the experience that comes from the real-life experiences of other clients, and can help nurture conversations and financial plans over time. An advisor who cares about the client, is ideally acting in a fiduciary capacity, but is not a blood relative is ideally suited to lead the discussion and planning process, and to encourage you to have conversations with your children. It’s also a perfect opportunity for you to connect your children – the next generation – to a trusted Financial Advisor and introduce them to financial literacy concepts.

Discuss Financial and Estate Planning Goals

Talk with your children about your lifestyle, needs, and priorities as you age. If you have an estate plan in place, share information on how to access it with your children. If not, work with your trusted Financial Advisor and an estate planning professional to create and implement an estate plan. Discuss the importance of planning for long-term financial goals with your children, so that they can set their priorities early and be better prepared for financial success.

Make a Checklist

Determine which documents you have in place, and check that you have proper, up-to-date documentation. Also consider document storage – are your key documents in a safe deposit box? Who has the key? Are they stored in your Liberty Wealth Advisors® secure electronic document vault?

Some of the main documents you’ll need prepared, accessible, and current are:

• Current will
• Living trust
• Durable powers of attorney
• Medical directives
• Insurance policies
• Review of beneficiary designations on retirement accounts and life insurance
• Health records
• Tax returns
• Credit card and loan documents
• Bank and investment statements
• Social Security information
• Location of safe deposit boxes and their keys
• Contact information for all professionals
• Long-term care insurance
• Records of digital assets (passwords, email, social media, etc.)
• If still employed, employer contact information related to potential insurance and other fringe benefits that may be available
• If a rental property or other type of business owner, all records that would be needed to manage those assets

Enlist Some Help

You don’t have to tackle all this alone. Strongly consider enlisted the help of financial professionals in your conversations with your family. They can act as an objective third party as you navigate some of the more emotional and logistically nuanced conversations around aging and finances.

Moreover, consider using a corporate trustee/trust company to execute your estate plan. Yes, it costs money, but it’s money well spent if it helps your family achieve peace of mind and removes some of the burdens and obligations of handling your finances. It can also act as an insurance policy against intra-family bickering, that sometimes arises when children have different ideas about what’s best, by providing an objective executor to your wishes.

Include your spouse and children in these conversations as soon as you feel ready. Sharing can actually relieve some of the emotional burden and stress associated with the financial planning and estate planning processes, and they’ll be able to provide you with support.

Explore Long-Term Health Insurance

Elder care can be expensive. Insurance is one way of offsetting the financial burden of long-term care if you or your spouse needs it. A private room in a nursing home can cost over six figures a year, and if paying out of pocket, that can quickly deplete your assets. It’s important to note that for individuals over 70, long-term care insurance can be very expensive, and certain pre-existing conditions may make obtaining this insurance impossible. Speak with your trusted Financial Advisor about the options available to you.

Research Senior Assistance Programs

Investigate the service and resources available to seniors, both government and community-provided programs. If you aren’t sure where to start, the ACL Eldercare Locator can help you find programs in your area.

Older individuals are usually aware when their mental or physical abilities start to decline and frequently take the initial steps of including a child as a co-signer on bank accounts in addition to reviewing estate planning documents.  There could also be more challenging non-financial issues like trying to downsize living quarters after spending decades in the same house. Your trusted Financial Advisor can help you navigate these life changes while maintaining your focus on your long-term financial goals.

Respect Your Dignity

It’s okay to go at your own pace. It can be hard for parents to let children help with their finances, especially if you’ve been independent for several decades. You’ve spent a large part of your lives managing a household and being in charge, not to mention spending years raising your children. This type of transition can feel daunting, but it doesn’t have to be an intimidating endeavor. Many of these suggested steps can be taken gradually, and you can adjust as you become more comfortable discussing your financial picture.

Prepare your finances and plans for elder care now in order to save your family time, stress, and expense down the road. Consider working with a trusted Financial Advisor and estate planning professional to ensure your affairs are in order. It’ll bring you and your children peace of mind, which is priceless. If you have questions about how to set up your long-term financial goals, estate plan, succession planning, or other wealth planning concerns, contact Liberty Wealth Advisors® at info@libertywealthadvisors.com or 800-448-3550.

 

 

^{This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented, nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.}