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Money Talks :: Discussing Finances With Aging Parents

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Does the topic of money make you uncomfortable or insecure? We believe women should educate themselves on financial matters. Sass has partnered with Moore Wealth to empower you on your journey towards financial security and confidence.

Dear Shabri,

My girlfriends and I were chatting last week and the conversation turned to inheritance. It turns out, most of them have met with their parents AND their parents’ attorneys and financial advisors! I haven’t done any of these things! To be honest, I thought I’d just get a check when they passed away. Now, with both of my parents’ health issues, I feel out of the loop—like I’m going to get slammed with surprises in the next few years. Where do I begin? How do I approach my parents? What questions do I ask of whom?!
Sincerely, Just a Country (Club) Girl

Dear Clubber,

Your girlfriends are right! You do need to have this frank conversation with your parents and it’s absolutely best to involve their financial professionals and the legal experts. One way to approach the conversation with your parents is say that you want to make sure their money goes where they want it to when they are no longer here. Even though the conversations are a bit difficult, the only way to ensure their desires happen is to know what those desires are! In the next 30 years over $30 trillion will transfer to younger generations. Many baby boomers stand to inherit large sums of money. They, in turn, will transfer substantial wealth to their children and grandchildren. Today, baby boomers hold 54% of total mutual fund assets! There are numerous actionable financial planning strategies that you can take to plan for these transfers. Behavioral finance tells us that there are an equal number of strategies involved in preparing heirs to receive those transfers.

Intergenerational wealth transfer planning should include parents, adult children, the financial advisor, CPA, attorney and trustees of family trusts. You may also want to involve business partners, trusted family friends and a behavioral finance expert.

A financial advisor can help you build a “Family Financial Map” through the following:

  • Create a family action plan that documents your goals and objectives
  • Identify and consult on current and future family financial planning needs that may include aging parents, adult children, minors and special need
  • Discuss which family members are best positioned to manage finances
  • Help business owners protect the future value of their business when ownership transition occurs
  • Work with your CPA to identify tax mitigation and savings strategies
  • Work with your attorney to develop gifting strategies
  • Evaluate advanced wealth transfer strategies such as intra-family loans, GRATs and IDGTs
  • Identify a behavioral finance expert to work with your heirs

A behavioral finance expert can assist heirs preparing to inherit substantial assets by facilitating family meetings, establishing the family’s mission and vision (ultimately empowering heirs to understand that family wealth can provide tremendous opportunities), establishing healthy family governance and developing long term financial and income stream strategies.

Now you have some great talking points! Be sure to check back in and let us know how the conversation goes and never hesitate to call our office if we can help!

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