Before my dad went in for routine surgery 11 years ago, as a precaution he told us he had everything we needed to know written down on a piece of paper in the top drawer of his home desk. Yeah, yeah, my two siblings and I nodded. See you in the morning.

Weeks later, after complications had left him in a coma and he passed away without another word at age 79, we were thankful for his prudence. Dad had left a note with all of his financial account numbers, piles of meticulously organized sales receipts and warranty documents, an inventory of his safe deposit box, and specific instructions for things like who he wanted to have his gold watch, money clip, coin collection, and diamond ring.

It was a great relief, while we were grieving, not to have to worry about hunting down critical info like where he banked and invested or second guessing his wishes about who among us got the possessions that meant the most to him.

So, have my wife and I put together a similar record for our three young adult kids, just in case? Well…

Don’t be a classic avoider 

Death is not fun to contemplate, especially if you are in your 50s or 60s, feeling good, and looking forward to a decade or two of scaling back work and enjoying life more.

Thinking about the physical and financial challenges of older age is no walk in the park either. Some 80 million adults in the U.S. are classified as conversation avoiders when it comes to end-of-life issues, according to research out of Marist College.

Seventy percent of family money conversations occur only after a health crisis or other emergency.
Home Instead Senior Care Network

More than half of adult children say conversations with their parents about family money make them uncomfortable, the Home Instead Senior Care Network found. That same research shows that 70% of family money conversations occur only after a health crisis or other emergency.

At this age, many of us know first-hand how difficult it can be to unravel an ailing or deceased parent’s finances and legacy plans. Digging up account numbers, passwords, and directives is a time-consuming chore that could be so much easier if everyone was, well, more like my Dad.

When there’s a will…

Yet few of us have written anything down or had the family money talk with our kids. Incredibly, nearly half of American adults aged 50 to 64 don’t have a will, according to Gallup.

And few have made critical expectations about family finances clear. For instance, seven in 10 parents age 55 and older expect one of their offspring will help them manage their investments in retirement, a Fidelity study found, but 36% of the adult children identified for the role don’t know Mom and Dad have mentally assigned them the task.

“Being open and willing to share your finances with grown children is one of the biggest issues I have with my clients,” says John Cooper, a financial planner at Greenwood Capital in Greenwood, S.C. “They are robbing themselves of the opportunity to talk about their values and why they have arranged things a certain way.”

Start with the basics

So, how much should your kids know about your money? If you are healthy and possibly still working, and the kids are just launching their careers, don’t forage too deep into the weeds.

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“Only a quarter of young adults are financially literate,” says Liz Crystal, a financial planner with the LC Group in Greenbrook, N.J. “You don’t want to overwhelm them.”

“Only a quarter of young adults are financially literate. You don’t want to overwhelm them.”
Liz Crystal, financial planner
LC Group, Greenbrook, N.J.

Your grown kids should have a basic understanding of what they can expect as you age, and then pass away, she says. Have you saved enough to see you comfortably through retirement? Do you have long-term care insurance that will help cover the bills if you’re no longer physically or mentally able to take care of yourself?

If so, let them know now that these are not things they will need to worry about as you grow older. If not, hard as it may be to admit to your children, they need to know that too.

In the Fidelity study, 72% of parents were counting on one of their offspring to be their long-term caregiver if needed, but 40% of the sons and daughters identified didn’t know this was expected of them.

Let them know their piece of the pie

If you’ve done well financially, and your kids stand to inherit money or assets, they should know that too. After all, it will be theirs one day.

But keep it vague, says Brett Anderson, a financial planner with St. Croix Advisors in Hudson, Wisc. Knowing about an inheritance can serve as a disincentive for a young person to pursue their own financial security. “How much you say should depend on their maturity and their own financial situation,” he says.

Plus, what you ultimately leave behind may be different than what you currently plan. Your portfolio may take a hit. Your health may fail and require costly medical care. You may change your ideas about how you want to live and whether you want to leave more to charity.

“Why should [your children] stress about expenses you are going to pay for?”
John Cooper, financial planner
Greenwood Capital, Greenwood, S.C.

It would be an unnecessary hardship on your kids, emotionally and financially, if you verbally commit to one thing, then later take it back.

Where you should make your intentions clear now, though: if you can afford and plan to cover any near-term bills your adult children may face, such as those for a wedding, grad school, tuition for a grandchild, or a down payment on a house.

“Why should they stress about expenses you are going to pay for?” says Cooper. Not knowing certain costs are covered could lead them to save less in their 401(k) and miss out on the full company match, he notes.

Keep talking the talk

Think of all this as the beginning of a years-long conversation—not a one and done, Cooper adds.

The idea is to break the ice now so that money talk will flow more naturally over time. That will make it easier to explore what your kids want and to explain your wishes.

“It is so important for parents in their 50s and 60s and their kids to be on the same page,” says Tony Drake, CEO of the financial planning firm Drake & Associates in Waukesha, Wisc. “Johnny may really want the vacation home while Suzie would rather have the cash to buy her own home. You won’t know unless you talk about it.”

Job No. 1: Get organized. Make a record of your bank and investment accounts (including the last four digits of the account numbers), a list of assets, any debts and insurance, your pension or other income, and recurring expenses.

The record should also have names and contact information for any professional advisers in your life—accountant, financial planner, lawyer. It should list any powers of attorney, your estate’s executor, any healthcare proxies, living wills, and wills.

You can find templates to follow online, such as this one put together by Vanguard. “The kids don’t need to read it,” Crystal says. “They just need to know where to find it.”

Consider the 40-70 rule

Your children’s fuller understanding of your financial affairs can wait until they’re old enough or mature enough to handle the details—or you’re getting up there in years or develop health issues.

Home Instead uses a “40-70” rule. By the time you are 70, or your oldest child is 40, your finances should be fully disclosed and discussed with the family, and the kids should have met your financial adviser if you have one.

“Call a family meeting and verbalize your will,” says Anderson. “Don’t keep secrets. The more clarity the easier the transition for your survivors.”

I’m not there yet with my three twentysomethings. They have a general idea of what to expect—they know we have saved enough to never be a financial burden to them but that the lake cabin may have to be sold if one of them can’t buy out the others—and that is where I will leave it for the time being.

The detailed discussion will have to wait until I’ve written my novel and learned to paint.

But I’ve begun to update a record of family assets. Should anything unexpected happen, it will all be written down on a piece of paper in the top drawer of my home desk.

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