^Yeah, our kids couldn’t believe how much we have to pay monthly for professional liability insurance and engineering software!
All I told D is that we have a living trust and it is in my file cabinet, she can find it when needed, regarding the financial details, I have a full record accounting of my assets. Its not her busines to know.
My mother opened her finances and trusted her children with all of her assets, depending upon us to make financial decisions. IMO, she was too uninvolved and trusting. We could have cleaned her out had we been that way.
My mother in law did not. Even though she clearly was incompetent in handling her financial affairs her entire life, it was more important to her to maintain control of the decisions, not share them with anyone, and keep the consequences to herself. She had more fear of criticism and of reactions to mistakes and bad judgment and lack of organization, than those consequences.
And that was HER privilege, right and choice. Until she was medically incompetent, she did not have to share an iota of her information it justify anything she did. It was HER money. Even when she entered that stage when she was medically not competent, because it’s not a cut and dry thing, DH could not bring himself to wrest control from her. It was our mess to clean up when she passed away and it was officially ours. Personally, I do not recommend taking this route. Also, you don’t necessarily know when you have entered incompetence (especially when you’ve been incompetent for a very long time before becoming medically so.). But ultimately, this is an individual choice.
Two women, about the same age with very different approaches to their money.
I’ve seen young people who are terribly hurt by parental inability or refusal to organize, budget and reveal family finances. It happens a lot, that parents refuse to fill out FAFSA and PROFILE. They may not have the information together and just can’t bear to pull it together, face the numbers, fill out the forms, divulge the information. And they do not have to do this if they do not want to do so. Whether we, or anyone agree with taking this path, it is their right to do so. Nor are you required to pay the FAFSA EFC. All of us can well see what a blow it is to kids when they get hit with all of this just as they get to the brink of adulthood. Better if this is not a surprise. But it’s still the right of the parent and sometimes they have good reason to take this stance.
Thanks for all the replies. We have told ds that our two most important financial goals are to get him out of college debt free and to not be a burden to him as we age. One down, one to go.
As far as revealing information to ds for college decisions, dh showed him what we had and where the monies were coming from. Most was already saved, but we still had to continue to fund some through current earnings. We used the “pile approach.” This is the amount in the pile that we have to pay for your education. It was available for undergrad, grad school, or (if not used for education because he accepted a large institutional merit scholarship) other “reasonable” things like a down payment on a house or for a car. Basically it was designated as ds’s money. Ds spent the entire pile on undergrad. When he selected his undergrad, we were very clear that there was enough for four years - no more. The pile came with the caveat that this was barring any unforeseen, catastrophic, family circumstances. He had other choices that would have completely preserved his pile and some that were in between. His outcome was fantastic, and we are thrilled we could provide what we did.
We are about to re-do wills and estate planning. It’s been about four years since we updated. Fil’s passing has spurred us to do a bit more so that things will be easier for ds. Fil had planned some but definitely could have done more. But, we can simply share with ds what we are doing and why without revealing ALL the details.
Since they were very young. I do 100% of our finances and my H has NO desire to even look at the stuff. I worried a lot about what would happen if I died unexpectedly. I got extra term life insurance for this scenario, because my H doesn’t manage money at all, let alone well. I have made out a multi-page document that lists everything important, our SSNs (now also drivers license/passport #s), and every account number/balance of checking, savings, retirement, investment, life insurance, car/homeowners policies, etc. I have a list of everything that is auto deducted from our paychecks and also auto deducted from our checking accounts. I have listed when odd large bills are to be expected (car/home insurance, real estate taxes, etc). Now, I also have a section on username/passwords for important online accounts, but I also list where to find all of the hard copy paper files. I update this document monthly and print it out 2-3x year. It might not be 100% complete, but it should hopefully get people started.
Anyhow, I shared this with my kids when S16 was in 8th grade or so. S16 had already taken calculus and is very much a $$$ guy. If something happened to me, he would be the one to take the brunt of stuff, but I want younger S to feel included. I went over with them what it all meant, and more importantly where I keep the document. And I also instructed them, if they are overwhelmed - take the document to my Dad. He’ll know what to do. But thankfully, nothing has happened to date and now I"m feel pretty sure that S16 could handle it all on his own now.
Do be aware that adulthood does not necessarily mean a person becomes mature, competent and stable. We all know this but it’s hard to swallow that our children, whom we love so much may not be able to handle life well. It’s one thing to lead a lifestyle that is not compatible with ours; it’s their life… but there is also the hard fact that not all of our kids are going to be the type of person we can trust or want to live the type of life that involves us.
Some of it has to do with mental stability. The teen and young adult years often are ruptured with mental illness, emotional instability, irresponsibility, bad decisions. If your kids turn out to be paragons of virtue, it’s wonderful. Most of us go through a rocky road with them. Financial it responsibility is often part of the reason— and I mean on THEIR part. Some kids steal from their parents , overtly which is a slap in the face but usually something parents have to face, and insidiously which is harder to swallow and easier to ignore and rationalize.
My kids, all of them, were not money leeches. They gladly accepted what we offered. Did not spend recklessly, had few demands, and we really underspent with far fewer material goods, certainly luxury goods than our peers. They made no demands and made do. We had a lot of kids and obligations, and they well knew it. They all worked and paid for a lot of their own things. Contributed to college and the household. I give them all A+ that way.
So it blindsided me that two of them turned out to be so fiscally irresponsible once they were out on their own. I won’t go into their issues but bills did not get paid with consequences. No budget, and they spent every cent they earned. The one is slowly getting better about this; still spend too much on stuff. I have no clue how kids who never seemed to show interest in material things, became adults who are out of control in their spending for them. It makes no sense. But, I’m not alone. Many of my the parents I know who broke their financial backs to get their kids through college loan free found out their kids snuck out Direct Loans. Some of them even filled out their parents’ FAFSA for them and signed it. Yes, fraud. Federal fraud. And these are kids you’d say are “good” without these dirty secrets bared.
And those are the less heart wrenching demons that rear their ugly heads like pop-a-moles carnival game. Drug addiction, alcoholism, bad company (maybe THEY are the bad company) , breaking the law bad choices. Those things happen. Most of the time, most of it gets tempered as they become adults, but not always.
It’s not unusual that kids steal from their parents. That untrusted BIL or cousin or nephew was once a beloved child and it’s a lottery for which your ticket might hit.
You entered it when you had the kids.
It’s s very very common thing that parental assets for old age get raided for the kids. Sometimes by the parents knowingly, even sometimes willingly. Sometimes not. Sometimes parents are blindsided.
Also, sometimes we have to face the hard facts that some of our children are not going to be self sufficient. It looked like one of my siblings was not, and DH has one that isn’t. If it’s illness or other blatant issue, it’s hits you in the face, and you can take measures. But it always is not something so clear as a disabled child, a drug addict, a child who canny stay employed. In some of these cases, giving access to too much financial info and accessibility to the same is a bad idea.
Our kids know that we won’t be a burden on them as we age (at least that’s our goal). They don’t know specifics of how much $ we have in savings, IRAs, investments. One son tends to misplace everything, so I’d be reluctant to give him a thumb drive with all our info. The other is more responsible. We have told them where they can find passwords, acct info, etc., but who knows if they remember.
Every year my dad sends my sister and me a detailed account of all his holdings. They are complete with contact information, account numbers, amounts, etc. Not only will this ease transferring assets on his death but gives us peace of mind that he has financial security for the rest of his life.
I have given general information to my kids about our finances. I have told them that most of the information is in a big blue notebook on my desk. I usually remind them of this if H and I are flying or driving together on vacation in the event of us both dying together. But since that scenario is unlikely, I haven’t done much more.
I have told my girls where are all of ID and PWs for my accounts, and the well. They know I have savings and I am working. I am not sure other than that what else do they need to know. D1 and her H do not tell me exactly how much they make together (I know the ballpark), how much savings or how they spend money, so I do not feel the need in having to disclose my information to them until such time I am not self sufficient.
Are there reasons NOT to tell your adult children about one’s finances? I’m in my early 60’s. My mother lived to 100 and my dad is still living, so if genetics are a factor, my kids know that they won’t (hopefully) inherit for another 30, 35 or 40 years! So the amount they might inherit is so speculative as to be unknowable. But in the event of an accident, they will know where to find the estate’s assets.
My parents indulged their financial information to me when I just started High School. It’s good to know where you stand after all.
Most web references suggest that the percentage of older people with dementia is fairly high, but under 50%.
Now that ds1 is involved in a serious relationship I am having to bite straight through my tongue when it comes to their finances. We are getting him through a master’s with virtually no debt, and I’m dying to know how she/they plan to pay for her law school next year!
My father was a financial disaster. When he died last year it was actually a fairly easy process. He had 3-4 insurance policies and those were payable to my mother as beneficiary. Easy. I sent in the claims (or called on the phone) and she had all but one policy paid (Mutual of Omaha was fantastic) within the month. He had 4 bank accounts all at the same credit union, and my mother was a joint owner on 3 of those. The savings and checking paid off the two loan accounts and anything left (very little) went to my mother. She even got the credit card points! He owed a lot of bills but there was no money left to pay them so I just informed them of his death when the bills arrived or off his phone (emails/texts/calls). There were a few things we had to transfer like the newspaper delivery, my mother’s cell phone, and the radio subscription on the car.
Lesson learned was to have all accounts with a designated beneficiary (not ‘estate’).
@“Youdon’tsay” - I think it may be better if they are not married if she is going to law school. D2 is delaying her potential marriage because of aids she may be getting if she wants to do public services while at a law firm (she explained it to me, but I do not remember). They should definitely check out all options.
My mom was a banker and my dad owned his own business until his accident when he was left permanently disabled. That was when I was in 7th grade. My mom got sick a few years after that. I’ve known everything about their financials since at least then. I don’t remember when they opened up with me but our finances have never been hidden from me. It was their way of teaching me financial literacy.
And then when the accident and illness happened, I became partially in charge of keeping their finances in order because they physically couldn’t and I needed to know in case anything happened to them. Plus, they weren’t going to be able to help me with college and I think this was partially their way of showing me why. It was very helpful when I was applying to colleges because I knew which financial programs I’d qualify for at various colleges based on my parents’ income and assets (ha!).
As my dad was disabled, I received SSI until I was 18 - which is another reason that I knew about financials. Since it went into my bank account (which I’d had since long before his accident), I knew why they were taking what I (at the time) considered my money.
My partner’s parents never went over anything financial with him so he was clueless when we first got together. Still is to an extent since I do all the financial stuff. When I got sick, I realized he would be in trouble if I died so I wrote up everything he’d need (including passwords, monthly bills and where they go, etc). I refuse to let our kid(s) be as clueless as he was when we got together.
Maybe it’s because I come from a line of solidly poor to lower middle class generations but finances are not something that have ever been hidden in my family. I know my parents’ stuff. They knew their parents’ stuff. I hope if we’re ever fortunate enough to have kids, I’ll be open with them.
According to one source, 32% of those over 85 have Alzheimer’s. However, Alzheimer’s disease only accounts for 60-80% of dementia cases, so the prevalance of any type of dementia in that age group might be 40-53%. Then, add to that another 15-20% with MCI, and a conservative estimate is 55-73% with cognitive impairment.
https://www.alz.org/media/Documents/facts-and-figures-2018-r.pdf
Tonight at dinner I asked DH and DD if they knew where the files and checkbooks are.
They both looked at me with I-know-I-will-flunk-this-quiz terror in their eyes. “The blue box?” “Your sock drawer?”
We agreed that tomorrow night at dinner with my cousin, we will ask her to please, please, please be their financial guardian if I’m ever hit by a truck. Yes my files are in order, but if DH and DD can’t remember where things are, I definitely need back up.
I’m not sure age should be the basis of telling kids financial information. Our youngest probably knows the most about our financial situation. One can’t keep her information to herself, so we don’t tell her much. Another barely talks to us, so we don’t tell him. The youngest is the one I would consider telling all about our finances, because he is interested in financial stuff, is very frugal, can keep “secrets,” and would probably make a good executor, even though he’s fairly young.
When older child was in high school (2005 or 2006ish), MIL extended an offer to cover his and DS2’s undergrad tuition. She didn’t give details beyond her ability to afford it. She did say, after 2008, that she wouldn’t be able to give as much as she had planned due to the decreased value of her investments. She shared the information directly with them as well as us. We didn’t take her up on her offer because of emotional strings, but I thought she handled the financial part of it very capably and well, revealing just enough information but maintaining her privacy.
When FIL was diagnosed with his terminal illness in the late 1990s, they (FIL and MIL) introduced DH to their financial advisor. Fast forward to early last year when MIL died, and the FA was an immeasurable help to DH and the attorneys.
My mother involves me in everything. At 88 she still handles all her own financial decisions and transactions, but she asks me to attend meetings with bank or financial advisor. She dislikes dealing with it but understands, asks questions that demonstrate a strong grasp of her situation, and executes the necessary paperwork or payments effectively. I think she’d like it if I actually did more of the hands on work, but (a) it’s her money and I shouldn’t have that much access to it at this point, and (b) it’s very healthy for her to be doing it herself, especially since she’s happy using me as a safety net and I’m happy to act as one. She tends a bit towards learned helplessness, but she also thrives on external validation. When she says something self-disparaging about her abilities, I’m able to honestly and fluently tell her exactly what I saw her do right, and what skill and ability I believe it represents.