TALKING ABOUT MONEY
Money. We agonize over how to stretch it, invest it, spend it, or give it away. And the older we get, the more we hate to talk about it. Especially with our adult kids.
Seniors with little money don’t want to burden their children. Members of the WWII generation — who value their self-sufficiency and independence — may especially resist these conversations. In these “traditional” families dad was the breadwinner, and mom raised the children. Once they were their children’s safety net. This role reversal hurts. They may feel ashamed and disappointed to ask for help.
Middle-class elders – good pensions, some investments, and long-term care insurance – may fret about how to bequeath their money. The questions for them: “What do our kids expect?” and “What’s fair?” These decisions can be equally tough.
Take a couple with three adult children: One is a successful engineer happily married to a lawyer with a big firm, two kids, and plenty of money. Another is a struggling actor. (The parents are paying his rent while he tries to get the ‘big break.’) The third is a divorced daughter with two children, a decent job, but living on the edge. They just paid her car repair bill so she could get to work.
What’s fair? Should parents give by need or in equal amounts? If by need, will the child who receives less feel less loved and valued? Is a will the place to reward a child who has been especially attentive to an aging parent? Or to express disapproval of one who made choices the parent didn’t like?
Wealthy families may have other issues: If they make generous gifts to their university or other charities, will the children be shocked? Resentful? Who should be named as Executor? Or as trustee of a trust? How strict or lenient should be the provisions of a trust? These questions become more crucial if the children are not friendly to each other. A will challenge can swallow the assets so fast that there’s nothing left but a residue of bitterness.
David Solie’s advice (How to Say it to Seniors): It’s easier to find good answers if we stop thinking of money as a “thing” to be accumulated and divided, and start seeing it as a means to express our values and the meaning of our lives.
The important thing for parents is to swallow your fear or pride and tell your kids (individually or all together) what you’re thinking. Answer their questions. Ask what they think is fair, and seriously consider their answers. Let them know you love them.
We welcome your views on this very sensitive topic!
Carol Holt says
I have a living trust which Shirley (second born and without children) will be my executor. I am going with her to update it this week so we will be having this conversation. The terms are essentially that anything left over upon my passing will be kept in a trust to be used only to further the education of my grandchildren until the youngest turns 26 and if anything is left over at that point distributed evenly among my remaining living children. By the time the youngest grandchild is 26, my children will all be retirement age so they are the ones who will need it most by then. The grandchildren are on their own at that point. They will have had their chance already. Of course if I survive until after the youngest is 26 it’s all moot and I may have used most of it up myself so no one should count on anything. In the meantime, I have been able to provide occasional support without seriously damaging my own security. So far I have been fortunate enough to manage my own affairs.
I saw a clip of Susie Orman telling someone that in money matters a woman needs to put the financial oxygen mask on herself first before going to the aid of her children. When you put your own financial security at risk you jeopardize the whole family. There are some children who will suck you dry if you let them and maybe saying no is the most loving thing you can do.
These are my thoughts on the subject.
Louisa Weinrib says
I like Carol’s comments. To that I add that the key to successful planning is good communication, love, trust and esteem between the generations, and our feeling that “fair” is not necessarily “equal”.
No matter how smooth the sailing is now, we are all just one accident, disease or divorce from disaster, and being financially prepared helps to cushion the fall.
> Should parents give by need or in equal amounts?
Equal amounts, of course, unless you want them to hate/resent/sue each other.
> If they make generous gifts to their university or other charities, will the children be shocked? Resentful?
The kids shouldn’t be shocked if you’ve tipped them off beforehand. If they choose to be resentful, oh well.
> Is a will the place to reward a child who has been especially attentive to an aging parent?
Perhaps, especially if the attentiveness involved significant personal sacrifices of time, energy and money.
> Or to express disapproval of one who made choices the parent didn’t like?
No. That’s just vindictive.
“Equality” may involve more than the will. Lynda agrees that service to the parent could be considered. Another way of deciding may be to even out life-gifts, e.g. one kid got sent to Harvard, another to State U. because she wanted/needed to be close to home. One kid got a huge wedding paid for; another never married. If the parent explains their thinking to the kids and considers their feedback there won’t necessarily be a fight. What’s needed is for each to understand they are equally loved.