I have had several life events over the past 18 months that have made me painfully aware of my personal finances and the finances of people I love. Luckily all of us were in good financial shape and, for the most part, had the right pieces in place. As I talk to others I realize that many others don't have frequent family conversations about finances. It is essential to know what is going on so that you can help someone when they need help.
Know general financial information of those you love
Dementia Today published an article about understanding the finances of your parents. I would say you need to know this information for your whole family. They recommend essential topics like:
- knowing who has durable power of attorney (and creating one if you don't have it),
- knowing what monthly expenses are and
- knowing where assets are.
Everything on this list is essential, and I bet most people don't know all 10 things for each family member. You may not need to know how much money is in the bank, but you do need to know what bank it is in.
Talk about what's next
Involve your family members in planning what's next. Most people want to leave parts of their lives as a legacy to the people they love. But we also need to remember that we have assets so that we can use them to care for ourselves. When it comes time to use those assets, what do you recommend they use first? Who would you recommend your family speak with to get things going?
John Romano and Evan Carroll wrote Your Digital Afterlife to help you plan what you want to happen with your digital assets after you are gone. Digital assets run the gamut from your Facebook account to your online banking account to your email to just about everything else in your life. This book is a tremendous help in getting organized. Organize yourself. And then help other family members get organized.
Reframe the conversation
Planning for the last years of our lives is difficult and unpleasant and people don't want to talk about it with others. It's just a drag. Try reframing the conversation so that it is more about what you want to accomplish in life and less about what happens when you are incapacitated or gone. It is so much easier to open the conversation when you start by dreaming. Pursuing dreams are a really important part of life. I would not have been able to take time to pursue dreams if I didn't have the support of my family. If you are having a hard time determining what you want out of life I recommend Mondo Beyondo, an online course about dreaming.
Have an annual meeting with your family
When I was getting married a friend gave me this advice and it is probably the best advice anyone has ever given me. On a yearly basis, it is important to talk to those you love about goals, dreams, finances and where life is headed. It is so easy to get caught up in the day-to-day that you lose track of the long-term and what you really want out of life.
I'm not sure what will work for you, but find something and start having conversations with your family. It is worth it. No matter how much you prepare your loved ones for your incapacity or death, there will be things that are not covered and you want to help them by eliminating the stress and burden as much as possible.