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Discussing Finances And Wills With Young Adult Children

Discussion in 'Miscellaneous in Parenting' started by Laks09, Jan 20, 2021.

  1. Laks09

    Laks09 Staff Member Finest Post Winner

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    What are your thoughts on discussing finances with young adults in the house?

    @Rihana mentioned that they have documented to dos if a situation arises when a young adult needs to take over(i.e; parents aren’t around anymore) and have discussed with the kids. I've been mulling over it since I read it.

    I agree with this thought process. Love the idea of creating a spreadsheet for the kids with to dos right after, a month later etc.

    I have reservations about discussing this in depth with the kid at this stage. I really don't want the young adult in question figuring out our current finances. My DH doesn’t opine one way or another. Basically he will go with what I decide. Which is to say, the entire burden of figuring this out is mine. I do want my DD to be able to go through this maze for herself and her sibling if a situation arises where both of us pass away. I am thinking of what to do to make it easy for her.

    Would you discuss your net worth and asset division with youngsters? I don’t know if that’s something that we need to do now. We have told her something in the lines of paying for a college degree and maybe a master’s degree(if she enrolls right after undergrad) and then she is own her own.
    We haven’t given her any other details. She doesn’t know there are wills and where they are. She doesn’t know what is where in terms of assets. We haven’t written it down anywhere except for in the wills.

    What do you all suggest we do as parents to help DD make financial decisions?

    A follow up question is also relevant here. What other things do you recommend for young adults to become financially savvy? Any courses/classes that we can enroll her in? I was thinking of getting a money market account for her to learn a little but if there is a structured approach, I'd love to follow it.

    @Rihana, thanks for bringing this up. Without your quoted posts above, I wouldn't have started thinking about this very important topic. Time has a tendency to fly and I am one of those procrastinators.
     
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  2. Rihana

    Rihana IL Hall of Fame

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    Hey Laks,
    A brief response below. More tomorrow, God and new presidents willing. : )
    Agree with you. They only need to know that they are taken care of for their education and living expenses till they turn 23, 25 or some such number.

    Same here. One thing to keep in mind is that there is no near-perfect way of doing these things. Whatever we do, there is some drawback to it. So, often the "not opining" spouse will instinctively point out the flaws in our approach. I learned that the best thing to do the bare minimum first and then improve it as time permits. Do not postpone the bare minimum in quest of a "near perfect" solution. Hope this make sense.

    I think they can be told and perhaps should be told the location of the wills and any living trust documents. The net worth and assets info can only be found by logging in to the financial accounts online, looking at the print statements or any spreadsheets the parent maintains. For this, letting them know where the passwords are should do I guess.

    You know.. we can come up with plans for this but they are so busy in college, there is not much dispensable time for this growth. Any time they do find, they would rather sleep or do something like a research project etc.

    ETA:
    I bought this book: https://www.amazon.com/gp/product/1119057191/
    And it was a good way to provide structure. The same content is available in sites like investopedia but this book makes it all in once place.
     
    Last edited: Jan 20, 2021
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  3. Hopikrishnan

    Hopikrishnan Gold IL'ite

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    If at all "your mileage may vary" applies anywhere, it does in what we deem our children are capable of.

    I like this:
    Well-to-do American-desi's are expected to launch children as healthy grownups, and without any student loan baggage, and keep a home ready to have them back, in case they need one.
    When children have their own address, a job with healthcare and retirement (401K) benefits, file their own income tax returns, they are usually more than ready to receive the information on the retirement plans of their old parents, and that "spreadsheet"on where the potential inheritances are, if the parents fail to spend it down/away. Younger children, (legal age, but still in HS or college) need to know where the spreadsheet is, and have dependable friends of parents to offer counsel on various things.
    I have not seen this before... but this would be useful for lot of grownups too.
     
  4. Rihana

    Rihana IL Hall of Fame

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    Due to no close family in the U.S., I tried making an ordered list of such dependable friends who could offer counsel to the adult yet still under 23 or 24 yrs children. I figured that even two or three names would suffice, and they need not be living nearby, just be familiar with U.S. laws, investments, and the way of things here.

    But, I have seen money kill the soul, conscience or sense of fairness in even the best of people. It is not like they mean to directly cheat or rob anyone of their money. It is more that they feel if a person has _lot_ of money, it is "OK" to distribute it among those that have less. The classic example being the Indian parents who take money or property from the NRI child and give it to the not-NRI child.

    Anyway, long story short - in addition to the names of dependable friends, I talk a bit with my bachchas about getting professional advice on financial matters. How to find and evaluate the professionals, to compare the advice from more than one, to trust one long term professional advisor or group, but to now and then also check with other professionals on a temporary basis, especially before any decisions involving bigger amounts of money.

    For counsel on matter other than money - life direction, education, career, marriage - I am fortunate to have solidly dependable friends. These can pretty accurately tell my child, "This is what your mother would have suggested for this." : )
     
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  5. Hopikrishnan

    Hopikrishnan Gold IL'ite

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    Yes... no need to be living nearby, but living within USA is helpful. "We" were both named as the primary executors in wills of friends (colleagues in the companies we had worked for, with extended families of their own in USA). The children of those families have known us since their birth, called us uncle/auntie, and took our, and even our children's "second" opinions on many things- such as car-buying, which college/major, job-seeking, should s/he date that one.. etc..

    Quite often one would feel like a god-parent, when named in a friend's will as an executor or personal rep. When those children reach the legal age, we'd remind the parents to redo their wills, and have a parent-to-child chat about how uncle/auntie is still there for them, even though they are off the will.
    :roflmao:Control from the beyond!!

    As parents grow older, there are other issues. Big mutual fund companies (like Vanguard and Fidelity) have begun to recognize that older people could start to suffer dementia, and would want them to name a "dependable person" who could have access to the mutual fund account.

    If you happen to have a responsible child, you are indeed lucky. You may congratulate yourself on having provided good genes and parenting.
     
  6. Hopikrishnan

    Hopikrishnan Gold IL'ite

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    @Caughtinbetween 's thread "Looking for Suggestions" should flag the various lapses in financial planning. The prime motive of family financial plan should be to enable continuance of the life (Roti-K-M, Transportation, healthcare) for the family when the prime breadwinner suddenly ceases to be.

    I am sure there are blogs/books on what to do, and in what sequence, and when to do such things. I recommend no hurry in informing banks/brokers/mutual funds about the deceased. If the decedent account owner had obtained an authorized ATM card for the spouse/children, the cards will continue to provide the daily max withdrawal amount, until the account is frozen. If it is a joint account, and the 2nd owner is among the bereaved, then there are no issues; however, there is still no hurry to inform the bank. Accessing investment account, using owner's password to gather information is fine, but transactions are not advisable.

    Losing one's privacy (professional strangers, bankers, lawyers, etc.. poking into our private financial situation) would feel like childbirth. Arguably as painful. Everyone would want an original death certificate - funeral, transfer of account ownerships at each bank or investment account, and of course the probate court, if it has to go there. A few places have come around to accepting pdf-files of documents necessary for such procedures; but not all. If the person passes on while not in USA (desi's on OCI visas during annual winter visits could pull this trick), will have to get that special Death Certificate (form DS-2060) from the US Consulate. This can introduce delays in the ownership transfer of a few US investment accounts.

    It is not easy to plan for all eventualities, but it is not difficult to plan for a modest level of continuance of living standards for the surviving family members. The case in the "Looking for Suggestions" thread seem to allege that the prime bread winner of the home failed to consider his wife an equal partner in the management of their finances. As in any wake, those who visit that thread, would consider the lessons, and use them in their own lives.

    Ecclesiastics 7:2
    It is better to go to a house of mourning than to go to a house of feasting, for death is the destiny of everyone; the living should take this to heart.​
     
    Last edited: Jan 21, 2021
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  7. EverydayBloom

    EverydayBloom Gold IL'ite

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    Hi @Laks09

    Thanks for starting this thread, every reply seems to be very informative. We just started discussing the finances with our almost 13yr old DS. He is showing some interest in knowing as well. So we started talking about net worth, investments, trading, retirement and taxes in very hight level. Sharing some online resources and reading some books on it and so on. As a first generation immigrants I myself is in learning phase with loads of info how things work in this country and sharing with spouse and DS the things which will help our future will make it easy for all of us, if we are here or not (you never know in this unpredictable times). I will stalk this thread to know things and share what I will find all along!! Thanks much.
     
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  8. Rihana

    Rihana IL Hall of Fame

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    Truth be told, that underline and the implication that I am setting up control from beyond got my goat momentarily. : ) I have often been called the over-prepared, over-planning, over-packing, overly early, detail-oriented etc. But I saw the reality in my own words. Mother or father, alive or gone, can only "suggest" to children once they are almost adults or adults. We can only suggest and then watch as they do what we think is beneficial for them or watch them squander away time, opportunity or resource that we would have given our right thumb at their age. : )

    I digress... but without digressions life would be so hard, no? : )
     
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  9. Rihana

    Rihana IL Hall of Fame

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    Hopi, my sincere dhanyavaad for bringing some levity to a weighty topic. "Roti-K-M" : )

    (1) Why to avoid the hurry?

    This was one dead-end in my efforts. All my work/planning is for the scenario of both parents gone, one at at a time or together. So, I tried to find a way that the high school-college age kids can easily access $15-30K to take care of immediate expenses such as cremations etc, pay immediate bills such as upcoming semester tuition etc. For obvious reasons, I didn't want them to have access to that while we parents are still around. : )

    When we are gone, they would then have access to our passwords and could logistically login and transfer money from our bank account to theirs, but if later when the account is being processed for closure, if it is detected that there was a freshly initiated transfer activity in our account after our official date of death, could that lead to problems? I asked this to a person from the legal help setup that DH's employer provides.. the long pause at the other end was hilarious. : )

    (2) How to make $15-30K easily available to 18+ year old kids to use immediately after parents are gone? And ideally, they should not have easy access to it when parents are still around.

    Is there a reason to avoid hurry in informing the bank?

    : ) : ) I looked at a diametrically opposite situation. If family in India told our teen children that my/DH's/our funeral(s) should happen in India. A vivid imagination is a devil in the mind. The idea of my child trying to take this decision was one of the most unsettling things of this process. A few lines in the will take care of this. They are not legally binding but the survivors have the ability to point to it and say this is what the dear departed wanted.

    I didn't want to say it there ... A general lack of planning is the norm. Most families at best write a will, make a living trust and leave it at that. With or without the will/trust, the surviving spouse will have to jump through some hoops to sort out the financial stuff, deal with unknown passwords etc. But in cases like that woman's - no college degree, never held a job, not confident with speaking English, it is the responsibility of the sole-earner spouse to prepare for such eventuality a bit more than others do. If not comfortable making major accounts joint or if the wife is simply not interested in financial details, then, spend couple of weekends writing up what to do if you die suddenly. And 3-5 days checking that beneficiaries are updated in major accounts.

    True. I also have quite a lot of loose ends that are so much work to look into and follow up. The "beneficiary/recepient of retirement accounts when both parents are gone" varies a lot even between the known names like Fidelity, Vanguard, Schwab. Some allow a living trust to be the secondary beneficiary after the spouse, some don't. At times I think hiding money under the mattress or in godrej almirahs is not a bad way after all.

    Any inputs on (1) and (2) above appreciated.
     
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  10. Laks09

    Laks09 Staff Member Finest Post Winner

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    Hi Rihana,
    Thank you for the quick response. Apologies for not responding sooner. I started the thread thinking I have time this week to respond and start my action plan. God had other things planned out!

    Thank you for saying this. I've been second guessing a lot of decisions lately.

    So true!

    This makes so much sense. I've been putting it off because everything isn't in order yet. Thank you for pointing this out.

    I have to at least point her to the wills and trust docs. Spreadsheet is currently in my head. I have to start putting it on paper right now!

    The said child is thinking of picking a related field in school. I was hoping this will give some sort of a personal finance lesson that most colleges don't seem to think is necessary.

    Thank you. I ordered the book just now. I felt like it will be a good one for me too.
     

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