Fidelity Investments recently interviewed a significant number of families who had a parent over age 55 and an adult child over age 25. The key findings are very interesting; what parents want and what their children think their parents want is very different. The result was that 40% of the families surveyed disagreed on the roles and responsibilities children should assume as related to the parents’ retirement years and final estates.
Who will be the executor of the parents’ estate? According to the survey, nearly all parents expect their children will assume the role of their executor, and half of these expect their oldest child to assume this function. Unfortunately, most of the children did not know this.
Unfortunately, not many parents and few children understand the complexity of dealing with an estate. Things can get complicated when there is a home to sell, and especially so if there is property in the USA or an active business that would have to be wound down or sold.
Caregiving responsibilities: Three quarters of all parents surveyed expected that one of their children would assume their needed long-term care responsibilities. However, nearly half of these children had no clue that this was expected of them. This becomes a major issue when all the children have moved away with some often out of country!
Who will manage the finances? Almost 70% of parents surveyed expect that at least one of their children would be willing to help manage their finances at some point during their retirement years. This is contradicted by a third of their children had no clue that this was expected of them.
Have “the talk”: Of the families surveyed who recognized that it was necessary to have “the talk”, it found that there was often difference of when it should occur. The survey also found that a significant number felt that these conversations were totally inadequate, including lack of discussions around the parents’ wills and thoughts about estate planning. For example, 70% of the parents believed they had discussed this with their children, but alarmingly, more than half of the children said this topic was never discussed. Similarly almost 30% said they did not know where to find all of their parents’ important paperwork such as wills, POAs and other legal and financial documents. So while not all families discuss the same things regarding elder care and expectations, the vast majority of both parents and their children who had any discussions regarding these issues reported a greater peace of mind. This is the outcome that every family should be striving for.
It’s clear that communication is often the weak link when it comes to elderly parent care or dealing with their estates. Start the conversation sooner rather than later, while your parents are of sound mind. Make sure your children know where the important papers are kept. This is where having current wills, personal directives and setting up the right type of “Powers of Attorney” will ensure everyone knows what is expected and that your children are in agreement with you wishes.
As with all things financial, sit down with trusted legal and financial advisors to help your family navigate these choppy waters, to ensure family harmony both when your parents are retired and when they eventually pass on.
Image licensed through Shutterstock