Everyone has heard the stories of a famous person or family member that passed away without a will or without ever informing his spouse or adult children about his financial affairs. Often, this places a huge financial and emotional burden on grieving loved ones and causes a lot of stress. Whether it involves tracking down a complete list of all assets/life insurance owned or just maintaining the bills after a death, adult children and spouses have a much easier time when a road map is created and provided to them.
A role of a financial advisor is to persuade clients to have discussions with their spouse and adult children about their finances. The biggest barrier advisors hear when discussing the topic is it will be a difficult discussion. That is why we suggest four strategies to foster better communication:
1. Use your advisor or another family member as a buffer to start and encourage conversation
2. Let the client dictate the agenda of what is and is not discussed (estate plan, value of investments/assets, allocation of assets upon death, funeral arrangements/etc.)
3. Start slowly – create a 1-page document listing all accounts with account numbers and passwords, important contacts, phone numbers and share with spouse/adult children
4. Create a sense of urgency by using real life examples of clients and famous people that recently passed away.
Is it time for you to have this conversation? Even if you think it will be too difficult, you should still discuss with an advisor and understand the ramifications if you do not.
For more information on this topic please read the NY Times article: http://www.nytimes.com/2013/