It seems as though everyone is talking about elder care these days. A recent segment on NBC's "Today" discussed how to talk finances with your kids.
Many children assume that their parents have financially planned for their old age. The result is that they don't necessarily think there is much need to look after their parents' financial well being as they get older.
The truth is that even adult children seem to have a misconception or misunderstanding of their parents' finances, in many cases. They aren't fully aware of their parents' net worth or the financial pressures they face.
How important is it for your children to be aware of your finances?
It's very important. It's also very important for your children to know about your estate plan or to be a part of it.
Here are some things you should tell your kids about your finances and estate planning:
- Who is your financial power of attorney? The financial power of attorney is the document that names someone to handle your finances on your behalf, if you're unable to take care of your finances on your own.
- Where are your estate planning documents located? This is important because it saves your family from running around and looking for your will when you pass away.
- Who is named the executor of your estate? The executor's job is to administer the estate and make sure that the estate proceeds are properly distributed.
- What does your health care directive say? With health care decisions, a properly drafted health care directive would help a hospital know with certainty whether or not the patient wants to stay on life support or not.
Your kids stand to benefit from your estate planning. But it's not just your kids who benefit from being in the know about your finances. You also benefit, if your kids have an accurate picture of your financial situation and your personal wishes.