Talk About Finances With Your Family

pig-bank-224x300Many of us will be seeing family members later this month and celebrating holidays together. It’s a nice time of year. Many families try to keep the conversation light and happy. (PS: Hint–unless your family has a singular point of view, stay away from political discussion if you want to keep things cheery).

One topic that isn’t discussed enough is family finances. Money is a verboten topic in most households, even with adult children. That’s sad at best, and very costly at worst. None of us are leaving this earth alive, so it’s important for family members to know the details of finances and have a “what to do” list if someone departs unexpectedly. Holiday time is a great time to do so. Apparently many others agree with me, since the following Struming posted in late 2016 is now the #1 read Struming of all time. I know am now past 500+ posts, so obviously I rung the bell with this one. So in the spirit of the holiday season, I share again the Struming, Talk About Finances With Your Family.

In the next two weeks it’s likely you will see your family for a holiday gathering. It’s also a terrific opportunity to communicate important information about your finances to them. Knowledge is an important gift–far more important than a gift card.

We all know that life is not forever. When the time comes, some of us will have time to get “our affairs in order”. Others of us will not. And none of us knows which path our end will take. As the great philosopher Paulie Walnuts said in a Sopranos episode, “Who among us knows what the future holds?” Wise man that Mr. Walnuts.

But one thing is for certain. It is YOUR responsibility to leave things in order for your family. Not doing so is selfish, lazy and incredibly cruel. It’s tough enough for your loved ones dealing with your loss when you pass. That’s NOT the time for them to try to find papers, figure out stuff, and inevitably cost them buckets of money and endless hours of grief.

This is not an article about how much you leave for your family. There is no right answer to that question. Obviously it depends on your means and your philosophy. Be fair and generous are the guiding principles.

But the purpose of this Struming is to encourage you to have your intentions known, and to provide a document with names, policy #s, phone #s, passwords etc. to make it easy for loved ones. And if you have adult children I encourage you to communicate your economic status to them, whatever it is.

First of all, the most important question is…Do you have a will? If not, shame on you. Stop reading. Click on this link 10 Steps to Writing a Will. My suggestion is to get an attorney to help you. Don’t assume anything. Make every intention clear. BTW, if you have investment accounts and retirement accounts how they are titled are critical, and the titling supersedes your will. So if you never got around to changing the beneficiary from your ex-spouse, your ex is entitled to money you may not have intended. Too bad. So pay attention.

But even if you have a will, the next kindest thing you can do is to draft a simple 2-3 page document of how tos, people to call etc.. Mine is called..“If Something Happens”. In one easy place you should have a list of people to call, documents, policy #s, passwords, etc. And have all those documents in the same place. I have them in a purple bucket. No symbolism in the purple color or that it’s a bucket. But it’s hard to miss in my home office. If you need some guidance as to what to include, I suggest you google, The Croak Book (yeah that’s the title) for a full document.

The document should literally be a road map that the bereaved family member can follow. This is particularly important if you are currently the person handling the day-to day finances. No detail is too small. Passwords are critical too. As part of this, you should update your net worth. How often should you update this? At least once a year, if not more often. The good news is that it will easy to do once do do a job good the first time. Your insurance policy, phone #s etc will be the same. Then an update can be a 10-minute job.

In summary, this holiday season spend some time organizing your financial life for the day when you won’t be here. Regardless of the size of your estate, it’s a wonderful gift you can give to your family. Do it today.

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