“Parents are often more than happy to offer financial advice to their children. They like to feel needed and want to make sure you're on solid financial ground. However, it's important to turn the tables and ask about their financial plans, too.”
The conversation may feel awkward the first time you start it, says the Daily Local News in the article “Ask your folks about their financial plans,” but you need to get to where everyone is comfortable having the conversation. Your parents’ plans might impact yours, and visa versa. So, it’s good to talk, “early and often” about how they are planning for retirement and the high costs of retirement, including health care.
If something happens to their parents, the children are the most likely ones to step in and take charge, whether it’s caring for a surviving spouse or stepparent or of the entire estate. The more you know in advance, the better equipped you’ll be.
Your first real job is a good opening to talk about saving for retirement. Ask them what they did, or do, about 401(k) contributions. This will give you insight into how well-prepared and knowledgeable they are about retirement savings. If you’re house hunting, that’s an excellent opportunity to get them talking about their retirement plan. Do you need to buy a home with a possible “in-law” suite in mind? It’s not a bad question to ask. It shows that you are thinking about their future needs.
Untangling an estate when there’s no will and no advance planning has been done, can tear a family apart. That’s the last thing you or your parents want. Talking openly with them about money, trusts, wills, life insurance and advance medical directives, will give you an idea of what they have or have not done to plan for the future. It may spur them on to move forward with plans that they’ve procrastinated on.
Even if you learn that they haven’t done any planning and don’t have a will, that is better than not knowing until it’s too late. If you learn that this is the case, you can start educating them about what will happen, if they don’t meet with an estate planning attorney. You can offer to take them to meet your estate planning attorney or offer to get them a few names so that they can decide who they are most comfortable with.
Starting a family and setting up your own estate plan is another opportunity to ask your parents what they did and what their thoughts are about your plans. Their family may have never done any estate planning, and they might have more than a few family horror stories to share. In that case, you can help them change the family’s dynamic, by helping them to take a different path.
Reference: Barchart (April 16, 2019) “Ask your folks about their financial plans”