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Talking money with adult kids

  • By Jean Chatzky,
  • Bankrate.com
  • – 08/29/2014
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It's so important for adult children to raise the topic of money with their older parents.

But as an older parent, there can be times when that adult child is so insistent that you become reluctant -- and with good reason, says Estate Planning Attorney Martin Shenkman.

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"When kids are too pushy, it's about the kids getting control of the money," says Shenkman, who has been in practice for 35 years, "(not) concern about helping Mom and Dad for their benefit."

Unfortunately, shutting even pushy kids out completely is not a good solution. If you were to become ill or incapacitated unexpectedly, someone needs to be able come in and run your financial life. Chances are pretty good that person will be your grown child.

So how do you know what you need to share and what you can keep close to the vest? "Disclose financial information," Shenkman says. "Financial details, no."

Specifically, here's the financial information to disclose:

Who's in charge? Your adult kids need to know that there's a point person designated to run the show if you can't -- and who that person is.

"A lot of times older adults have chosen a child to do it, but they haven't had the discussion with the entire family because they're worried the other members of the family will be offended," says Linda Fodrini-Johnson, executive director of Eldercare Services, Inc. This is need-to-know information, particularly if you want to preserve the relationships your adult kids have with each other after you're gone.

Who do they have to call/contact? Chances are, you've assembled a team of people who've helped you with your finances through the years. Your kids need to know who they are and how to get to them.

So, pull together a list, including the names and numbers for the tax preparer or accountant, the broker and the lawyer. If there's a personal banker, include that person. Be as specific as possible, says Shenkman. "You need to disclose what the kid will need to do and access to be able to help (you) in this emergency."

Where are the accounts? "Most kids don't have a clue," about what their parents spend their money on, says Shenkman. "The answer is incredibly simple": Bank and pay your bills online. If your kids need to know what bills they have to pay, they have an electronic trail to follow -- as long as they have the passwords.

How can they step in? One thing that's fundamentally essential now -- as compared with just a few years ago -- is access to all of your passwords and user names. Shenkman and his wife aggregated all of their logins and passwords into a secure and encrypted database. Then, all you need to do is make sure your child has access to the master login for the password keeper. The other key to enabling your kids to take over in a pinch is having a durable power of attorney in place and making sure they know where to find it.

And if after all this, your kids keep pushing? They may be worried about you not having enough to maintain your lifestyle. Say: "I understand your concerns about us, but we really have taken care of all of our needs," says Fodrini-Johnson. "Maybe we need to have a meeting about what we've done -- not how much we have -- but what we've done and what you'll need to do if anything does happen." Then bring in a third party to monitor the proceedings.

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