Napolitano looks at money.
Discussing money with family members isn’t one of the easier conversations to have – especially when gathering for a holiday or family occasion. Nevertheless, these conversations are important, and should be had if you are looking to be helpful.
This talk should happen with family members you care about. Let’s start up the family tree with parents. It’s common for older generations to avoid discussing money. But these are the questions that should be asked, regardless of their willingness to answer.
Ask if their estate plan is current. Don’t be shocked to learn their estate plan may be as old as they are.
Ask if you have any roles in the settlement of their estate(s), such as trustee, health care agent, or personal representative. If yes, then you have the right to examine the documents to better understand your role. This also provides opportunities to revise or improve upon the current plan.
If there is a business interest involved, ask about the succession plan and who owns that business after the passing of the owner. Determine if the agreement is in writing, funded, and still relevant based on the condition of the business and the people that may be left behind to run it.
Ask about cash flow and if they feel at ease living their life dreams from a financial standpoint. Inquire if they’ve got a bucket list. Common among those nearing retirement is an ingrained mentality of not spending. Many don’t realize they may be able to afford and accomplish some of their bucket list items.
On to siblings – it’s ok to discuss financial issues you may have in common. For siblings with minor children, ask if they’ve appointed successor guardians in case of their pre-mature passing. Don’t be surprised if your sister reveals that you are their undisclosed choice or that they haven’t done anything.
The last: your children. Children with the most to lose are young adults with minor children. The important issues for your kids are guardianship of their minor children, the amount of life insurance on each parent, and the type of estate planning documents they possess.
Many young adults don’t have much of an estate, but many do have dependents and a young spouse. Imagine this, a young parent with $1 million in life insurance passes away and that money goes directly to the young surviving spouse who remarries quickly and then gets divorced, splitting that money with their ex and not your grandchild. A better solution is a trust for the benefit of a young surviving spouse and your grandchild, disinheriting any potential spouse number two.