Difficult conversations may often occur when families gather for the holidays. Retirement expert Ben Rizzuto helps you prepare for three that really matter.
For many of us, the holidays are a time for family. We gather around tables and cluster near fireplaces, sharing stories of years past and indulging in some yuletide cheer. That is, until an uncomfortable topic comes up. Sometimes, however, these questions are a blessing in disguise; they allow you to set the stage for helping honor the legacy of your loved ones before it’s too late.
Financial professionals may always be thinking about sensitive areas like estate planning or elder care, but for the rest of the populace, these awkward conversations can be both stressful and unexpected, especially at this time of year. But this may also be the only time of year families are gathered together in a forum where all voices can be heard.
Fortunately, you can help facilitate these conversations by supporting your clients with information and planning resources. Encourage them to anticipate what may be a long-due conversation, and let them know that you’re available for meetings, phone calls and even moral support.
The hardest question for anybody can be “What’s going to happen to it when you’re gone?” regardless of which side of the question you’re on. Recognizing holidays as a time of gratitude for the gifts we are given in life, those gifts are often the source of great stress once a loved one passes.
With assets like a summer home or cabin that will be passed on to another generation, it’s important to communicate the rationale for why certain decisions were made. Even in close-knit families, these types of distributions could cause resentment. A financial professional I work with recently shared an example from a favorite client. While one sibling wanted to keep a beloved cabin in Jackson Hole out of respect to the cherished time he spent there with his deceased uncle, the other, who lives abroad, would like to use the funds of a to pay for his daughter’s education. Trying to reach a compromise has taken over a year, adding to an already difficult mourning process.
Conversation starter/Question to ask: Your law school fund for Emma has been so helpful to all of us, and allowed her to pursue her dreams. All gifts, however, are not financial, and we want to make sure that we can help you share what’s most important to you with those you believe it could impact most. Does it make sense to have a conversation/ start working with a financial planner to structure these gifts?
A financial professional once told me that he recently had a version of one awkward conversation with several of his clients during the holidays. Basically, they said to him, “I just wonder whether this will be our last holiday season all together and healthy.”
The elder care discussion is fraught with emotional landmines, but it’s one of the more important financial conversations family members can have. Will aging retirees need in-home care? Would they be better off in a retirement community, and if so, what location and characteristics are most important? And most importantly, how can a family establish a plan with which everyone is comfortable? How will roles and responsibilities be divided?
Given the emotions involved and complexity of the topic, few children, despite their best intentions, are ever fully prepared to assume the responsibility of being an executor, trustee or agent. Parents should be proactive by informing their children of their decisions – and also giving them the option of declining these responsibilities.
In addition, make sure that your and your parents’ Health Care Proxy includes a HIPAA Authorization so your loved ones can make health care decisions in the event one becomes incapacitated.
Conversation starter/Question to ask: It was heartbreaking what happened to our childhood neighbor Suzanne. It may make sense for us to talk about our wishes if we were to be in a similar situation. One of the hardest questions for her children was who should make her health care decisions when she could no longer speak for herself. Is that something we should decide while we’re all still enjoying good health?
According to a recent Economic News Release from the Bureau of Labor Statistics,1 wage and salary workers have worked for their current employer for a median of 4.6 years. The standard of spending most of a working life with one company is becoming less and less common.
Considering how much time we spend at the office, conversations about careers, promotions and plans for the future are staple holiday conversation topics. Parents want to know that their adult kids are taking the right steps to prepare now, while kids may be anxious about their parents’ long-term financial situation.
Parents can relieve financial concerns by sitting down with their financial professional to map out retirement income needs. They can also provide financial clarity by working through what many call a “Love Letter to My Family,” which lists account locations, information and key contacts for the next generation.
Finally, discussing family values when it comes to finances, such as how parents would like children and future generations to learn from a lifetime of experience and consider using their wealth in the future, can be very helpful.
Conversation starters/Questions to ask: You’ve spent your life giving back and sharing your success with others. What are the most important family values you want to make sure we recognize and honor? How do you view philanthropy and family giving as part of your legacy? What can we do together as a family to begin instilling these values with the grandchildren?
In all things in life, communication is key. Although it may be uncomfortable to discuss the inevitable, many times these challenging conversations can bring a sense of hope and relief to both parents and children.
And even though we may not always be able to agree on sports or politics or whether fruitcake is delicious during the holidays, one topic we can probably all agree on as a family is that providing the best possible legacy and easiest transition can give comfort to those we care most about.
1Bureau of Labor Statistics, Economic News Release. “Employee Tenure Study.” September 20, 2018.
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