- Written by Attorney Pamela Oddy, 220 Exchange St., Athol, Mass., 978-249-7511
- Published: July 17, 2020
Most couples that I work with to create an estate plan have chosen not to share their finances with their children. When to tell children about a parent’s finances is tricky at best. There are many times that I receive telephone calls from a worried and frightened adult child stating that his/her parent has just had a massive stroke or has just been diagnosed with Alzheimer’s and the child hopes that I have a record of the parent’s finances. The parent’s lawyer is not always a good place to turn for this information because the parent might not have seen or talked to the lawyer for many years, making any financial information gathered during the will interview obsolete. Oftentimes, the child does not even know what bank holds the parent’s checking account or if the parent has certificates of deposit or if the parent has investments of any kind and where they are.
When to tell children about a parent’s finances is tricky at best.
Sometimes, there is an immature or troubled child that makes the parent reluctant to share any knowledge about finances. Sometimes, the parent is involved in a second marriage with children from both marriages, which makes it quite complicated to explain anything about finances. And sometimes the parent just does not want to share anything, instead keeping everything private.
The bottom line is that there is no magic time to share your finances with your children, but here are some suggestions to help you determine when is the right time to open up and sit your children down and explain what’s what and also what’s where:
1. Make a list of your assets, similar to a spreadsheet, that contains the name or names on each asset and where it is. For example, list all bank accounts separately and put the account number and bank where these bank accounts are. A good idea is to update this list every year—make it a New Year’s resolution to redraft the list. If there are no changes, fine, but if there are changes, make sure they are noted on your list. Be sure to tell your children where they can find the list. What good is making out the list if no one knows where it is?
2. Tell your children who your lawyer is and also who your financial advisor is. Often, the financial advisor will have information on investments or mutual funds or stock portfolios that your children would have no way of knowing. The lawyer just might be holding the parent’s original will and powers of attorney.
3. Perhaps hold a family meeting so that you can explain a.) where your list is; b.) why you chose one child over another to be your power of attorney and personal representative (formerly known as “executor”) of your will; and c.) what your end of life medical decisions would be if you were not mentally able to make those decisions.
This information is designed to allow and facilitate the child to help the parent when the parent is no longer able to make decisions. It is not a time to let the child guess what assets the parent has or wonder if the parent has any life insurance or suspect that the parent has pre-paid the funeral or surmise that the lawyer is holding the parent’s original will. The end of life is not a time to be doing any of these things because it could actually result in prohibiting the child from helping the parent just when the parent really needs the help. The timing of sharing the parent’s finances with a child is a moving target and cannot be prejudged as to when is the best time, but, at some point, it absolutely needs to be done.