Linda P. EricksonLinda P. Erickson, CFP®, is the president of Erickson Advisors and a registered principal offering securities through Cetera Advisor Networks, LLC, 336-274-9403 lindae@ericksonadvisors.net.
Some families talk about everything; other families talk only about the weather. Communication can be very hard, particularly about those subjects that remain “taboo” in many families. I’m speaking here about family finances, family wealth (or lack thereof), and what arrangements Mom and Dad have made for their end-of-life management.
If you don’t have the habit of discussing financial decisions with your children or haven’t developed that habit over the years, it will not be easy to start when the subject becomes critically important. Like any habit, financial communication should be practiced early and often. If you are working with a financial planner professional, you may be invited to set up a special family meeting to discuss those things that are difficult to bring up at a Thanksgiving dinner, a wedding or a funeral, events that bring families together.
Whether you set up a family meeting strictly for this purpose or you have a family that is comfortable discussing the subject, here are a few things that should be communicated – and verbalized – before an “event” makes the subject critically important.
Do you have a will and if so, (very important!) where is the original stored?
Do you have a Durable (Financial) Power of Attorney; if you have one, to whom have you given your Power of Attorney (POA)?
What are the triggering events that will require your POA to take over your financial affairs.
Do you have a Health Care Power of Attorney, and have you made end-of-life directions regarding life support, food, and hydration. This is perhaps the most important discussion to have since it is often where families have conflicting views of what should be done and when. Your physician will want to know to whom he or she should contact for decisions, and your family should be prepared to let that person carry out your wishes which they clearly understand because you have recorded them in your document and communicated them verbally.
On the strictly financial side, your POA must be selected for strength of personality and responsible ethics. You are giving this person the “keys” to bank and investment accounts, so he or she should be selected for good decision-making skills more than financial expertise.
I have worked with several families over the years who feel that as long as their wishes are clearly written down, all will be well at the end-of-life and after their death. Sadly, this is often not the case. Family dynamics can and do override the expressed wishes of the dying family member. Talking before you are too ill to explain your wishes is a very caring and responsible thing to do.