NEW YORK (MainStreet) — Elderly Americans and their adult children just aren’t on the same page on estate planning issues, and that can lead to a big legal and financial mess if an older family member passes away.
According to Fidelity Investments‘ 2014 Intra-Family Generational Finance Study, a clear majority of U.S. families have a hard time discussing estate planning issues, which can cause both parties to feel stressed over family money matters in the future.
- “64% of parents and children disagree about the right timing for these conversations to occur. Parents would prefer to wait until after retirement, while their adult children want these conversations to happen well before their parents retire or experience health issues.”
- “The majority (75%) of adult children and their parents agree it is important to have frank conversations about wills and estate planning, elder care and covering retirement expenses — however, these conversations often lack depth.”
One big step in fixing the disconnect is to have parents and children agreeing on a digital estate — a mechanism in which both parties have access to passwords for the elderly parent’s financial accounts, among other key checklist items.
New Year’s is a good time to have that conversation, as it can set the tone for better estate planning discussions for the year, says David Walters, a certified financial planner and certified public accountant at Portland, Ore.-based Palisades Hudson. You don’t want disaster to strike if the head of the household passes away unexpectedly and you don’t have the user names and passwords needed to access the deceased’s financial account, he says.