The 'Money Talk'

As I was growing up on our family farm, there were plenty of conversations about how the crops were doing: Are corn prices headed higher or lower? Should we raise more pigs next year? Less? These were the common and the simpler conversations around many farm family dinner tables. I fortunately had a front row seat to see and hear my dad and grandfather talk a lot about the financial aspect of the farm, like how the crop sales were going to impact the success of the farm that year, and what we had to do differently next year to adapt to the ever-changing farm economy.  

Now, as a financial advisor, one thing I’ve noticed with many parents and children is that they never really talk about money. Parents rarely share with their children what they have saved for retirement, their financial plans, or their final wishes. Living in the Midwest, I see a stigma surrounding money discussion where the subject is off limits to discuss with others, particularly amongst our children and our heirs.

Why is that? 

Your children will be the ones there when mom or dad pass away, supporting the other grieving parent. Worse yet would be if both parents are gone and the children have no direction, no plans, no clue where to start—just a lot of frustration and questions, trying to figure out mom and dad’s estate and stuck trying to make everyone happy, including the lawyers, accountants, and other siblings or family members.

So why are we, as parents, afraid of having that “money talk” with our children?

I was blessed to have seen my father be both a son and a business partner to my grandparents.  From a business perspective, they all worked very hard to keep the family farm as successful as possible, and from a personal perspective, to keep their relationships healthy and loving throughout their lifetimes. I believe good communication was the key to making that possible. And I believe good communication is still the key.

Having the ‘money talk’ with your children can be awkward, uncomfortable, emotional, and a myriad of other things at the same time. Depending on your children, they may feel that it is not their place as your child to hear such personal topics. Maybe you feel that, as their parent, you don’t need to discuss your finances with them. However, keep in mind that this will affect them sooner or later.  That is a given.

As their parent, it’s important to share and give your children a clear overview about your retirement finances and what your estate plans and final wishes are. Not discussing these items can lead to many problems later, including some serious conflicts among your children or other family members after you die. While this is not an easy topic to discuss, it is a necessary one.

You are the only one that knows your wishes. You are the only one who knows all the details about your finances (you have two checking accounts at two different banks), estate plans (you want to make a donation to the historical society), and how you want things to be handled when you are gone (white roses at my funeral, and please don’t let Aunt Mildred sing).  

You can help your kids get through this process during what will likely be a very difficult period for them with some simple planning and open communication. By having these conversations now, you can help eliminate those misunderstandings that could devastate the family unity you have today. If you think it won’t happen to your family, I would challenge you to rethink that. I have seen it happen to some of the most put together families I know.

Not sure where to start? Our office has many tools to help you prepare for your family meeting. Here are some points to consider:

  • Start off by at least clueing your kids into where your will and estate documents are located so they can find them if they need to. If there is a key, code, or combination required, make sure someone knows where to find it so these documents are also accessible.

  • Don’t have a will or estate documents? No problem. We work with local lawyers that are well versed in estate planning who can help write one that is personal and fit exactly to your wishes. They also help with setting up trusts, medical directives, and power of attorney, among other things.

  • We offer a prepaid funeral trust through National Guardian Life designed to put away funds that cannot be touched for anything except your funeral costs. Any extra money goes to your beneficiaries. This helps give you some peace of mind knowing that your children and family members don’t need to scramble to come up with funds to pay for your funeral, which often run in the thousands of dollars.

  • Having this type of conversation needs to be planned ahead of time.This should not be a spur of the moment conversation at your family birthday party.It is best to find a location that is free from distractions where everyone is comfortable. Feel free to call our office and make use of our conference room if you need a neutral location. If you feel like you need a moderator, I’d be happy to sit in and either help explain or just make sure things stay on track.

If you still aren’t sure where to start, feel free to visit me at the office and we can discuss the best way to broach the subject and get you started in the right direction.

-Brian