We have filled out the FAFSA with one child or another since 2007 - there is enough info there to give them a good idea of where we are at.
After the trouble of dealing with my Dad’s finances, and this trouble was mainly concerning his wife’s family that had access to everything and arranged it to suit her and themselves, I am completely determined that my children should know about our various accounts and where our papers are. They wouldn’t be interested in the particular numbers at this point but they need to know how to find out whatever they might need to find out if something happened to us.
D1 and D2 have started “real jobs” with the joys of getting benefits and the pains of all that paperwork it creates so they are more ready for this than D3 who is still in college.
I’ve tried to speak to my in-laws about these issues and at least now I know they keep their papers in a file closet in their closet! It’s a start.
Finances were never discussed in my family. Recently, my Dad gave me a key to his safe deposit box. The safe deposit box contains all their financial information, plus copies of wills, account numbers, everything. He didn’t show me the specifics; it was obvious that this was to accessed “later” if needed.
Our kids don’t know many specifics either. DH and I plan to have our Ds meet with our estate planning attorney this summer when they are both home. They won’t know specific numbers of our assets, but our attorney will show them how the estate planning is structured. They will have his card; our wills are stored with that firm. Also, we will show them where to find all our financial stuff in the event they ever have to access it. Our executor has also been provided with this information.
DH doesn’t have a “salary” per se. His income comes from brokerage commissions and personal investments. All of which happen when they happen, not as a yearly known quantity. There is no reason for the kids to know specific details every time we make any money.
Thought I’d pass this along in case others might be interested. My parents have used this comprehensive organizer and told us where to locate it. Nice to know that they have thought how they want things to be and have it spelled out without having to actually discuss it face to face (much appreciated because who really enjoys having discussions about losing our parents or other loved ones??) It covers pretty much anything you can think of in the event of one’s death. It doesn’t replace a will but covers all the details some of you have mentioned with your binders plus other things like funeral preferences, distribution of personal items, etc. It covers not only the money issues but all the other little details and preferences that will help family make decisions and deal with everything after a death. I’m glad my parents have had the foresight to do this, especially with some sibling relationships in the family that have been cantankerous at times.
And when your Dad dies the bank will not let you access the safe deposit box, unless maybe you have a signed copy of the will in your hand which names you as executor. Which you won’t have, because the will is in the safe deposit box. They may or may not let you access the box under their supervision to remove the will and only the will. Depends on the bank.
Best to have a copy of the will somewhere else. The attorney’s office?
^^^^I am officially on the account with the bank to have permission to access the box. He didn’t just give me the key. He and I went up there one day, signed the paperwork, etc., and I have access the same as he does and his wife does. Besides the fact, I would know of his passing well before the bank would know.
I tried to talk to my kid a few times. Zero interest. I put all the finances in big binders, color-coded and showed her where they are kept. Will revisit the issue in a few years.
S knows our financial situation is good and we will not need his help in our golden years - but doesn’t know all the details.
I know all my mom’s financials. Everything is already in a trust and I have power of attorney, I’m now joint on her one checking account that is not in the trust. I can also direct her investment banker on trades, moving money, etc and I am account manager on her credit cards. Also on her safe deposit box.
My mom is of sound mind and I have no intention of doing anything unless she becomes incapacitated. But when she was hospitalized for three weeks after a terrible tumble I had to go online and pay a bunch of her bills. Unfortunately, she wrote all her passwords down in some code only she knows so I needed her to interpret. After she got out of hospital I rewrote all her passwords in English.
We’ve been wrestling around the trust issue and are pretty much at a standstill right now.
Those who have them why do you have one and who administers it for you while you’re alive and what happens after you’re gone?
@Iglooo, The same happened in our family. Our “kid” thought we could be healthy and would be capable of handling this forever? LOL. I think the children could not imagine that we won’t be able to do this at a certain age.
We do not have a binder. Once in a while, we just found out what we had and wrote it down in a small notebook. Two categories: one for “after taxed” and the other for “before taxed” (i.e., IRA, 401K.) It does not take much time for us to do this – we do not have much to begin with.
We’ve pretty much shared all of our financial info with our kids. How else are they going to learn? Also, I want them to think for the long term.
It used to be trusts were set up to take the maximum estate tax exemptions, and dictate terms of distribution after you die. It also helps to avoid probates if you are in states with complex probate procedure. The estate tax law has changed in a way you can save on the estate tax just as well without setting up trusts. So setting trust became a lot less attractive. No more financial advantage although it is still useful to avoid probate and to dictate how to distribute. It will be distributed according to terms laid out by you before you die. Typically, instead of your kid inheriting everything when you die, you can spread it out, for example, 50% when the kid turns 30, 50% at 40. If the kid blew the first time, they get a second chance, etc. But imo irrevocable trusts are PITA.
@eyemamom, my mother is both the grantor and the trustee now that my dad passed away. My sister and I are the beneficiaries. My parents did it so probate can be avoided in Florida because it can be a nightmare there.
My kids never knew specifics growing up but know that we as a single parent family had enough to get by but not enough discretionary income to do too many extras. They also knew that it was a fixed budget so they didn’t bother asking outside the boundaries. I always managed to scrape up $$ for cleats and art classes, that sort of thing, and I always budgeted two family vacations a year, one camping (think cheap lol) and another either skiing or WDW, something like that. Not until my D applied for colleges did I get more specific with her. She about fell off her seat when she found out how little we had managed to live on compared to that of her bio Dad who always boo-hoo’d about being broke (5:1 give or take after support). I am a master at stretching the dollar lol and it didn’t hurt that my mortgage was extremely low. I am now working two jobs, paying for college, and dumping every last penny I can into a 401K. I also did a will with specific distributions of the little I have lol and opened up a bank box with my daughter as co-signor.
I have some idea of where my parents are at and I am the co-signor of all bank accounts as well as the executor of their estate. They lived a low middle class lifestyle and Mom still works full time at 74 years old. I convinced them several years ago to do a reverse mortgage so they could “live a little”. Although Mom still works full time for the health insurance (and to get some space from you know who), they are able to vacation a few times a year, go out to dinner weekly, that sort of thing and not worry about heat and prescriptions and other day to day expenses. Had it not been for a mooching barely-employed younger brother (now 47 years old) who still lives at home with his unemployed/never employed wife no less, I would have felt more secure in knowing they could live off their social security/earned income/small savings. But, I convinced them it better to use their own home equity…those of us who have worked will survive without any inheritance and those who have mooched will soon learn that there is no inheritance. So sad.
I heard CA and NY are also nightmare states for probate. I have to qualify what I said about not being advantageous to set up trusts. There are highly sophisticated trusts that still benefit financially. I was only referring to standard A-B-C trusts that used to be used for estate tax purposes.
I have a binder with all the account statements in it. And I told the kids and my sister where it is. If H and I went down in a plane crash or car accident together, I’m afraid the kids would be absolutely lost on how to cash out and then manage their inheritance.
We also know our parent’s finances. I don’t see why people keep this a state secret.
I didn’t think it was any of my business how well my father did (and he did well). I got what I wanted - a good education - and wanted for not. Whether he actually was pulling down (say) $400k or $4 million before he retired wasn’t and isn’t my concern because I was and am not entitled to any of it. I know enough to know it’s being well managed. I hope he enjoys every penny.
I only know my mom’s finances because she drew down too much and spent above and beyond and cane to us for help. It’s a very upsetting situation because it was completely avoidable - she had plenty to live on if she had just gated it appropriately. It is a big stress for me and my H as my mom is in good health and could easily live another 20-25 years (her mother is still living independently at 96).
Our kids are still young (oldest is HS junior - youngest still in elementary school). The kids all know about their 529s and that we have savings and investments. They make decisions about what type of investments and have paid taxes on small UGMA accounts that grandparents set up. Every year when they sign tax forms they review the figures. That is all the younger kids know.
The HS junior has an idea about our combined salaries (not the actual breakdown of individual) but no idea about the $ amount in our retirement savings (investments) or savings. She knows we have some and that we value saving for a rainy day. We sat down and did the Net Price Calculators for schools that she was interested in - leaving the savings part pretty vague. She knows that we live on much less than the salary # and is starting to understand mortgages, health insurance costs, retirement costs, costs of running the household ect...
It has helped in that she is much more aware when in one week we had to write a check for AP exams, yearbook, musical tickets, orthodontist co-pay, drivers test fee, field trip, SAT registration, ect… that the money coming in does not change from month to month but some months the money just pours out. That week she made a comment asking if we had enough money to cover all of those expenses - and we had to tell her that honestly “no, this month we spent more than we brought in … but we were lucky to have some left over from some other months where there weren’t as many extra expenses.” These are important conversations - but I don’t think that our younger kids are quite ready for them yet.
We do not share much with them, nor did my parents with me. I just recently found out how much they had when my Dad died.
@Pizzagirl Your thoughts on your dad’s finances are 100% how I feel about my folks. I hope they enjoy every penny, too and I’ve always operated under the assumption I am owed and expect nothing. I have siblings who seem to be counting on something. It could happen or my parents could wind up needing years and years of assisted care that could chip away at even generous assets.
@NEPatsGirl Kudos to you for doing so well as a single parent. I’d like to give your brother and his wife a kick in the rear.