This Father’s Day weekend, you can start a new tradition: a family financial discussion. Financial advisor Brad Allen stopped by Milwaukee’s WTMJ-4 to share 5 questions to get the (sometimes tough) conversation started.
Many adult children don’t bring this up because they don’t think it’s any of their business. I say to them- you couldn’t be more wrong- take the initiative and start the conversation. Start by telling your dad that you care about him, and you want to make sure he is prepared because the day may come that he can no longer take care of his finances. Without a financial discussion, it could be like a jigsaw puzzle trying to put all the pieces of your finances together.
1. Do you and mom have a will?
Only about 40% of Americans have a will. Many people put it off because they don’t want to think about what happens after they die, but it is very important to have your legal documents in place so your assets go where you want them to. A will is a cornerstone of your estate plan. But even if you have one, your work is not done yet. You’ll also want to talk to your financial professional and an estate planning attorney about setting up a living will, a financial power of attorney, a medical power of attorney and any trusts.
2. Where do you keep your important documents?
Your financial and estate planning documents need to be accessible to your family if something should happen to you. Your family needs to know where they are and how to access them. You can store your paperwork in a fire and waterproof safe in your home, but make sure someone knows how to get in. If you choose to store your documents in a safe deposit box at a bank, add a person you trust as a joint owner. Your estate planning attorney can also keep your estate planning documents or signed copies in case something happens to the original paperwork.
3. When was the last time you revisited your estate plan?
This is one of the biggest mistakes people make in estate planning: setting and forgetting. Life insurance policies, bank and brokerage accounts and retirement plans typically all have beneficiary forms. These forms typically override your will. You should update all of these forms every couple of years and after every major life change, including marriages, divorces, deaths or births.
4. Are you and mom protected in case something happens to one of you?
We recommend life insurance to anyone with dependents, including a spouse and/or children. It can be confusing to figure out how much you need. A rule of thumb to consider is multiplying your salary by ten. That number may vary depending on your family’s unique needs. Click here for a life insurance calculator.
5. Who is your financial professional?
A financial advisor can play a big part in easing everyone’s comfort level. The financial professional can help guide a family conversation about money, but he or she will not give out any information the parents do not want shared, like specific dollar amounts. Introducing adult children to their parents’ financial professional can help smooth out the transition after the parents pass away because the kids will already be familiar with him or her.