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As families gather for Thanksgiving this year, money is a topic that will not be discussed.
Still, experts say now is the perfect time to start the conversation, especially with aging parents.
More than half of Americans – 56% – say their parents never discussed money with them, a study finds. recent Fidelity survey of 1,900 adults aged 18 and over.
One reason is that many people have a complicated relationship with money and wealth.
Most Americans — 89 percent — said they don’t consider themselves wealthy, Fidelity found. For many, being rich simply means not having to live paycheck to paycheck.
As for how much wealth they have, most Americans say they accumulated it on their own, with 80% identifying as self-made and just 5% saying they inherited it, Fidelity found.
The fact that many people rely on themselves, especially older Americans, may explain why many don’t feel the need for more formal financial planning, according to David Peterson, head of advanced wealth solutions at Fidelity.
A third of baby boomers say it’s not necessary to have a financial plan, according to the Fidelity survey, the highest figure of any generation.
“They kind of have a mentality of going their own way, and that’s probably why they keep a lot of it to themselves,” Peterson said.
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Yet experts say not having a plan in place can leave individuals and their families vulnerable when unexpected events occur.
If you know what your parents want, write it down and know where things are, it makes things much easier in case a parent dies, becomes ill or starts showing signs of dementia, said MaryAnne Gucciardi, Certified Financial Planner and Financial Advisor. at Wealthmind Financial Planning in Cambridge, Massachusetts.
“You want to catch things early, proactively and preemptively, so you know what they want and can defend them,” Gucciardi said.
The holidays are a great time to start conversations about family finances, Gucciardi said. But these discussions can also take place whenever there is a group meeting where siblings and children can also be involved, she said.
How to Start the Conversation About Family Money
Research has shown that money is consistently one of the topics Americans prefer not to talk about.
A recent U.S. Bank survey found that more people would rather reveal who they voted for in the presidential election than talk about their finances. Other research from Wells Fargo finds that discussing personal finances is almost as difficult as talking about sex.
To start the conversation with aging parents, experts say it helps to start small.
“Don’t go into this thinking you’re going to solve everything on this particular vacation,” Peterson said.
To get the conversation started, you may want to talk about your own estate plan and ask them for advice on anything you’ve missed, he said. This way, you can get an idea of how far along the process is, Peterson explained.
It may also be helpful to bring up examples of deceased friends or family members with organized or disorganized estate plans, and how this affected their loved ones left behind.
“What I like to do is start with small topics and move to bigger topics,” Peterson said.
Peterson explained that wealth can be transferred through property titles or beneficiary designations. But for assets that do not pass through there, you need a will, he explained.
Without this planning, you leave it to the state’s licensure process. When a person dies without a will, also called dying intestate, a state’s intestate succession laws determine what happens to their assets.
“The question is: do you want to be the one who makes the decisions?” Peterson said. “Usually when you ask the question that way, you get an answer that suggests they want to be the ones in charge.”
In addition to a will, it is helpful to have other documents in place, such as a health care directive, power of attorney, and HIPAA authorization in the event of a parent’s health declining, Gucciardi said.
If these documents haven’t been established recently, you may want to review them to make sure they are up to date, she said.
Often, people have accumulated assets over their lifetime and lose track of them, such as savings bonds or insurance policies, Peterson said. This creates a central location where everything will be stored, physically or digitally. Bank safes should be avoided because they can be difficult for loved ones to access, he said.
With more assets stored online, it’s also important to ask about access to financial, subscription and social media accounts online, Gucciardi said. Using a password manager can help ensure these assets are secure, she said.
As families engage in these conversations, it may be best to start small with a single area, such as health care preferences, and then build from there, she said .
To help start the conversation, books can be a great icebreaker, Gucciardi said. Among the titles she recommends to her clients are: “Who will receive Grandma’s yellow pie plate?” “Crucial conversations” And “To be mortal“.
During these discussions, try to listen more than talk and ask open-ended questions, Gucciardi said.
