When is the right time for a parent to begin the conversation about their finances with their children? Or for a child to start this conversation with their parent? How do you balance getting help – without giving up all your control?

There is rarely a clear “right time” for this conversation. Conventional wisdom says to have it ‘before a crisis occurs’ but that timing is unknowable. The more helpful guidance is that if you are thinking about it, then it’s time to have a short conversation about it. Thankfully, there are ways to approach this topic that make it less daunting.

It may be uncomfortable at first

The natural order is that parents are caretakers for their children, and even as our children become adults and start families of their own, a parent continues to be a source of wisdom and example (whether the kids admit it or not!). So, this “asking your child for help” can feel unnatural for many people. That does not mean communication is always easy, especially around something as personal as your own finances, but we have seen the positive benefits for many client families we’ve worked with.

Focus on communicating essential information/organization

If you are unable to handle something, decide you simply no longer want to deal with it on your own, or just feel calmer knowing there’s been some preparation for life’s unexpected twists, including medical events, then you want to be sure your kids have the key information or know where to find it.

Where are your financial accounts
(bank, investment, retirement, insurance, monthly bills)

  • Who should they contact to access them?
  • Keep copies of statements and contact information in a secure location and let your kids know where it is

What are your desires around legacy
(wills, trust, power of attorney)

  • Who is your attorney and are they still practicing?
  • Consider sharing copies of legal documents with your kids, or at least make sure they know where you keep them.

Bringing in trusted people to the conversation

Another option is to consider inviting your child to accompany you to your annual meeting with your financial advisor team or your attorney. This can be an important introduction that will help ensure that ‘your people’ know each other and if needed can work together in the future. An additional benefit is that it is a way for children to get more educated on these issues as well.

At North Berkeley, we often have the privilege and responsibility of asking these questions, and we try to be helpful to our clients and their families. We see it as a way for parents to take care of their children, once again; reducing future stress and complication at a time that’s likely difficult for other reasons.