Family Financial Conversations

Excerpts from the Book – Preserving Wealth – written by Jack Lumsden, MBA, CFP®

Based on my experience of helping many families over the years, I have found that there are four essential conversations that families should be having concerning their financial and estate plans.  They are:

  • The Estate Documents Conversation.
  • The Eldercare Conversation.
  • The Legacy Conversation, and
  • The Next Gen Financial Education Conversation.

The Estate Documents Conversation

The estate documents conversation is a conversation you should have with your parents, children, executors, and powers of attorney to review and discuss the following key issues:

With your parents:

  • Find out who their powers of attorney and executors are.
  • Obtain copies of their wills and powers of attorney (or the location of the documents).
  • Meet your parents’ financial advisor(s).
  • Obtain the listing of the location of their financial assets and contacts for their bank, accountant, and lawyer (see Appendix C).
  •  Have a frank discussion on what they would want to happen if they were unable to make financial decisions for themselves.
  •  Have a frank discussion on what they would want to happen if they were unable to make health care decisions for themselves (also see Eldercare Conversation below).

With your children:

  •  Let them know who your executor and powers of attorney are.
  • Provide copies of your wills and powers of attorney (or the location of the documents).
  •  Introduce your children to your financial advisor.
  • Have a frank discussion on what you would want to happen if you are unable to make financial decisions for yourself.
  • Have a frank discussion on what you would want to happen if you are unable to make healthcare decisions for yourself (also see Eldercare Conversation below).

With your executor and powers of attorney (if not your children):

  • Let them know you have appointed them and provide them the documents.
  • Confirm every few years that they are willing, able, and capable to act on your behalf.
  • Provide to your executor/power of attorney the list of where your financial assets are and the contacts for your financial advisor, accountant, and lawyer (see Appendix C).
  • Have a frank discussion on what you would want to happen if you are unable to make financial decisions for yourself.
  • Have a frank discussion on what you would want to happen if you are unable to make healthcare decisions for yourself.
  •  Have the eldercare conversation with your power of attorney for personal care.

The Eldercare Conversation

With your parents and/or children, have a conversation about the potential strategies if a physical or medical setback were to occur. Issues you may want to discuss could include:

  • What would the strategy be if they/you needed some extra help to continue to live at home?
  1. How is this to be financed? Is it in the financial plan?
  • What is the strategy if they/you decided they needed to or simply wanted to move into a retirement home?
  • Do they/you want or need to downsize their home?
  • What is the strategy if only one spouse or parent needs care in a retirement home or long-term care facility?
  • What would happen if both required care in a long-term care facility?
  • What is the plan if dementia occurred for one or both spouses or parents?
  • Have any funds or insurance been set aside to plan for extra care?
  • Finally, create a list of all doctors and their contact information, and provide details of any health or insurance plans you may have in place.

The Legacy Conversation

The legacy conversation is a conversation you may want to have with your children and/or beneficiaries to discuss how your estate will be passed on.

This will help you to:

  • share your most important values with your children.
  •  let them know what you wish to happen as you age.
  •  potentially reduce confusion, discord, and family conflict.
  • talk about any concerns you or they may have; and
  • feel in control and let your children know that you have a plan.

Some of the potential topics to review could be:

  • what’s important to you in the legacy and wealth transfer process.
  •  the values you wish to pass on.
  •  the people who will have a leading role in your planning.
  •  health care issues, and the “eldercare” plan.
  • why you may be using trusts versus an outright distribution.
  • potential controversial issues, such as difference in amounts each child may be receiving.
  • your charitable plan and strategy.
  • your plans for your business.
  • Finally, let your children and beneficiaries know who all your advisors are.

The Next Gen Financial Education Conversation

This is a conversation you may want to have with the next generation to emphasize the importance of financial education and help them to be well equipped to handle their own financial affairs as they go through life’s transitions. Your financial advisor may be able to assist with this. Some key concepts and topics to review include:

  •  how to budget for post-secondary school.
  •  your first job and setting a lifestyle you can afford.
  •  simple budgeting and cash flow planning.
  • understanding how taxes work.
  •  leasing versus buying a car.
  • understanding your employer’s benefit package.
  • setting up a savings program.
  • understanding the impact of interest charged on credit cards.
  • the difference between good debt and bad debt.
  • types of investments, such as high interest savings accounts, mutual funds, stocks, ETFs, etc.
  • types of savings vehicles, such as TFSAs and RRSPs.
  •  the financial impact of life’s transitions, such as:

    getting married
    buying a home,
    having children,
    changing jobs or careers,
    getting divorced,
    caring for an elderly parent, and
    safeguarding any inheritance, they may receive.

For more information you can refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®

For your FREE Copy CLICK HERE

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.

Insurance products are services provided through Assante Estate and Insurance Services Inc.

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