Paycheck Chronicles

On Your Holiday Menu: Talk To Your Parents About Money

Prepared or not, the holidays are upon us. I can’t help but smile as I think about family, friends, food, fun and yes, the few pounds I’m going to gain over the coming weeks. What a great time of the year! Of course, I wouldn’t be a financial planner if I didn’t include another “F” in the holiday mix -- finances.

You might expect a lecture about shopping with a list, budgeting ‘til you’re blue, or avoiding running up your credit cards. While those are all great financial ideas, I’m actually heading in a slightly different direction. Multi-generational family gatherings are one of the highlights of the holiday season for many families. Beyond goodwill, hugs, kisses, and tall tales that spark embarrassment and fond remembrances, these occasions offer another important, if sobering, opportunity: The chance for a family financial pow-wow.  In other words, you've got to talk to your parents about money.

Crickets. That’s what I normally hear when asking clients if they’ve had detailed financial conversations regarding their wishes with their parents or kids. So, I’ve mapped out three topics that are a must for this crucial conversation in hopes of spurring you along.

You've got to do it:  talk to your parents about money.  This holiday season might be the right time.Financial Decision-making

Who’s going to make decisions and pay bills if you or your parents can’t? For married folks, this is typically pretty straight forward – their spouse. However, if you or your parents are single, widowed, or just wouldn’t be capable, it can become more complicated. Having a plan in place and discussing it before a crisis is critical. This will help avoid confusion, hurt feelings and -- court. As part of this discussion, you should review existing powers of attorney or make a plan to get new ones drafted.

Medical Direction

When it comes to medical care, you should make your wishes and plans known. This includes documenting who will make decisions on your behalf. It also includes what you do or don’t want done if you’re terminally ill, a list of your doctors, and a review of the insurance you or your parents have acquired for long-term care or to supplement Medicare. Document, document, document...

Leaving your Legacy

How things look on the financial front is important for everyone in the family to understand. Do your parents have a solid retirement plan in place or could they be turning to you for help? Encourage them to make a go-to list of accounts and points of contact. You should also discuss their wishes once they’re gone. Who will get what and when? If that makes you uncomfortable, at least make sure they’ve drafted the right documents, titled property correctly and touched based with an attorney to ensure they’ve got all their ducks in a row.

So, as the leaves start falling and the air cools, feel free to blame me as you start your own financial conversation with your parents (or kids!) over the holidays.  It may not be fun, but talk to your parents about money anyway.  It's a good idea.

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