The kids are gone, time for a new financial plan
Once you become an empty nester, you’ll want to reevaluate your money.
USA TODAY
“The Talk,” in parenting circles, is generally defined as an uncomfortable conversation with your children about sex.
But there is another talk. It happens later, and it’s just as hard.
Aging parents fret and procrastinate over sitting down with their adult children to talk about money – and power of attorney, and medical directives, and all the other issues that arise toward the end of life.
AARP offers a book titled “The Other Talk: A Guide to Talking With Your Adult Children About the Rest of Your Life.” The topic popped up again in the December-January issue of AARP The Magazine, wherein a Gen X couple explains “Why We Told Our Kids All About Our Money.”
We’ve adapted our own discussion about ”the talk,” with commentary from experts at AARP, Trust & Will and Northwestern Mutual.
Why to have ‘the talk’
There are plenty of good reasons to tell your adult children about your finances, estate plan and end-of-life wishes, experts say.
If you don’t have the talk, your children may waste precious time chasing down your accounts and assets when you are incapacitated or dead. They may have no idea what bills you owe, what cash you’ve stowed, or what plans you might have for that investment property or stash of jewelry.
“You’re saving months, and thousands of dollars, by doing a little talking,” said Craig Parker, assistant general counsel at Trust & Will.
Many aging parents lose their ability to sign checks, make online payments and dispute bills long before they die. If you don’t walk your children through your finances now, you risk leaving them unable to help you later.
“As a parent, one of the nicest things that you can do for your children is to reduce the number of puzzles and surprises that they have to deal with either when you’re in the hospital or after you’re gone,” said George Mannes, executive editor at AARP The Magazine.
Talking through your affairs with your adult children “reduces anxiety and worry for the next generation,” said David Hamilton, a financial adviser at Hamilton Wealth-Northwestern Mutual.
Not having the talk can seed conflict. When you’re incapacitated, your children may bicker over where you wanted to live, or how far you wanted to go in prolonging your life.
In the probate and estate planning worlds, Parker said, “most of the litigation is from families that don’t talk.”
When to have the Talk
Many Americans want to talk to their children about estate planning, research suggests, but fewer follow through.
A 2024 survey of high-wealth boomers by RBC Wealth Management found that 89% thought it was important to talk to heirs about inheritance, but only 39% had actually done it.
The best time to have the Talk, experts say, is as soon as they’re ready. And adult children are probably ready.
“Once they are adults, sooner is better than later,” Mannes said.
If not all your children are adults, you can provide “broad outlines” of your plans to a younger child, Mannes said.
And don’t assume a single conversation will cover everything. Hamilton recommends “having these conversations continually, rather than a one-and-done.”
How to have the Talk
The best approach for broaching money, incapacity and death with your children is to tell it straight, but with sensitivity, experts say.
Your adult children need this information. But they probably don’t want to hear about your decline and demise any more than you want to talk about it.
“Make sure that you are handling it with empathy, because it can be an uncomfortable conversation,” Hamilton said.
A little reassurance might help. Consider opening with, “Hey guys, we’re not planning to go anywhere for a very long time, but we do want you to be ready for when that day comes,” Hamilton said.
You don’t have to go into every clinical detail in your end-of-life plan. Your adult children may not be ready to hear whether you’d like to be kept alive with a breathing machine or feeding tube. But you can tell them where to find those directives when the time comes.
“My gut feeling would be, tell your children as much as you think they can handle,” Mannes said.
What to cover in the Talk
The talk is not just about what you have. It’s also about why you have it.
“It’s really not a discussion about death as much as it is really a discussion about your values, and making clear what your values are,” Parker said.
As you lay out your assets and accounts, explain why you have them. Tell your children why you hung onto that investment property, and whether your retirement savings is more or less than you’d hoped.
You should also plan to cover some specifics:
Estate plan
Your estate plan dictates what happens to your assets when you die, and who manages your affairs in an emergency while you are alive.
As part of that plan, it’s helpful to create a file, on paper or in a computer, that helps loved ones find and access your accounts, including account numbers, passwords and pins.
Will or trust
These documents instruct how to distribute your assets when you die. A trust bypasses probate court, which administers wills.
Power of attorney
Power of attorney lets someone else make decisions and access records on your behalf, especially regarding health care and finance.
Advance directives
These instructions lay out what health care you do or don’t want when you are incapacitated. A living will or health care power of attorney form typically includes advance directives.
It’s just as important, experts say, to tell your adult children whom you have named as legal agent, trustee of your trust or executor of your will. Also tell them why.