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The talk parents need to have with adult children

A Fidelity study found that adult kids and their folks aren't on the same page when it comes to discussing finances.

By MSN Money Partner Jul 25, 2014 4:42PM

This post comes from Krystal Steinmetz at partner site Money Talks News.

Money Talks News on MSN MoneyIf you think the birds and the bees is the most uncomfortable discussion a parent and child can have, think again. It seems there's an even more difficult talk: the one between parents and their adult children about money.

 Adult with elderly parent © Digital Vision/SuperStockAccording to Fidelity's Intra-Family Generational Finance Study (.pdf file), parents and their adult children agree that discussing finances -- including retirement planning, elder care and inheritance -- is important. Unfortunately, they can't seem to agree on when the conversation should occur, and how much financial detail should be covered.

The study found that while parents prefer to delay the conversation until after they've retired, most children said the finance discussion should occur earlier, before retirement or potential health issues arise. Overall, just 40 percent of parents said they had a detailed conversation with their children about expenses during retirement.

Some parents said they avoid the financial talk because they don't want their children to count on receiving an inheritance, MarketWatch said. The top reason kids said they don't want to broach the discussion is because they believe it’s upsetting to talk about -- both for them and for their parents.

In a press release, John Sweeney, executive vice president of retirement and investing strategies at Fidelity, said:

These discussions aren't always easy, but there can be real emotional and financial consequences when they don't happen or lack sufficient depth. It's absolutely critical that families take the time and break down any barriers to sort through important matters related to retirement preparedness, caregiving responsibilities, estate planning and the tax implications of an inheritance. The alternative is putting these matters off until a crisis occurs, at which point the options may be limited and there could be unintended financial repercussions.

According to AARP, Lauren Brouhard, senior vice president of retirement at Fidelity, encourages adult children to talk to their parents about how they're going to live when they're retired. It's also a good time to discuss important documents, such as a will, health care directives and a power of attorney form.

AARP wrote: "While adult children can remain sensitive to a parent’s financial privacy, 'there are some key things that children should be aware of and need to know if they need to take on responsibilities,' Brouhard said."

Here are some key findings of the Fidelity study:

  • Financial security. While most adult children (56 percent) think their parents worry about financial security, in reality, less than a quarter (23 percent) actually worry.
  • Estate value. It turns out, it's not always easy to figure out how much your parents' estate is worth. The study found that adult children underestimate the estate value by more than $300,000.
  • Caregiving. Forty-three percent of adult kids expect that they or a sibling will need to act as a caregiver in their parents' retirement years. Mom and Dad don't agree. Only 6 percent said they expect their children will have to care for them.

Because discussing financial matters can be tense, Fidelity suggests initiating the "voice not vote" rule, "which makes adult children aware that their parents' financial planning is not a democracy. The parents are ultimately in control of their decision making."

This is definitely a talk I need to have with my parents and my four siblings. But like so many other Americans, we avoid it because it's an uncomfortable (though necessary!) discussion.

How about you? Have you had a discussion about finances with your family?

More from Money Talks News

Jul 25, 2014 9:13PM
My parents never told my brother or me anything about their finances, but now that they are in the nursing home and my brother is disabled, I have power of attorney, and for better or worse, have figured out everything about their finances.  I don't think they were trying to hide anything, it's just that their generation was tighter-lipped about money.  I am trying to be uber-responsible with their finances, as I am with my own.  One example is the $8000 of uncashed checks in unopened envelopes that I found in their house and put into their bank account.  It was obvious that they could no longer take care of themselves, let alone their finances.  There is not much in their estate, but a whole lot more than there would be if I hadn't plugged the leaks where they were were bleeding money unnecessarily (insurance and tags on vehicles that didn't run, fees for services they weren't using, utilities and TV services for an empty house, etc.).  This all works because I have their best interest at heart and am trustworthy, but an unscrupulous person could clean them out in a hurry.  This all would have been much easier if they had filled me in on a few things before they became so disbled.
Jul 25, 2014 7:27PM
I'm building a 68 hot rod just to give the little brats one more thing to argue over when I'm gone.
Jul 25, 2014 8:40PM


I and my two siblings did the exact same thing. Losing a parent is hard, but ALL of the legal paperwork, including funerals and burials, were totally taken care of. EVERYTHING  was settled without ONE argument. And THAT IMO is better than anything else.

Jul 25, 2014 8:30PM
One of the best things my Mother did was share estate information with my brother and myself. We each had copies of her will, lists of everything she owned of value and where the valuables came from. We were also listed on her utilities as authorized parties so when she passed we just had to call to disconnect. We discussed the possible need for nursing care including nursing home care. Loosing was her still difficult but so much easier than most of my friends who had no idea of their parents finances.
Jul 26, 2014 3:31PM
I think this article is really missing something. Parents need to talk to their children about responsible use of money, saving money, the dangers of debt, avoiding credit card debt, and compound interest (which works both ways - one to a person's advantage, and the other which increases debt and the actual cost of a purchase). Too many young people are not wise stewards of the use of money and much of it is because parents never talked to their children about how to use money. Of course, some of that is probably because parents have been poor stewards as well.

On the other side, when parents have accumulated some financial assets, their children need to know how they did it - hard work, scrimping and saving, putting money away regularly, etc. It's not as much about how much has been saved as it is about how it was accomplished.

Jul 25, 2014 8:28PM

When there is a lot of money involved, the children generally know it, and details are not necessary.

However, when children wrongfully believe that they will have a substantial inheritance, they tend not to save money themselves.  Remember more times than not, by the time children inherit, they are already retired themselves.

Jul 28, 2014 10:30AM
I told my parents that the last check they write should bounce.  It's their money to enjoy.
Jul 28, 2014 9:11AM
make your own money and don't count on your folks to leave you anything, if it happens then its just extra. I watched a lot of rich kids waiting around for their "Inheritance" only to waste their lives. Finally getting what little was left over in their late 50s and 60s.
Jul 25, 2014 8:12PM
  " adult children underestimate the estate value by more than $300,000 " Where in the world did you get this information from? Under by 300 G's ? Are you dopes on drugs or what ? Most estates are no where near 300 grand to begin much less be off by 300. And if your little bastards are counting your cash before you have had your last breath then leave it to the dogs. Your local shelter will make better use of it and the dogs will wag there tails in your honor.
Jul 25, 2014 11:16PM
My husband and I have shared our wills with our daughter, she has been given details of our financial affairs, and we have discussed our living wills with her.  We have all talked about our plans and expectations regarding our old age future (we're in our 60s) and our deaths.  I guess I don't understand why these are such taboo topics for many people.  Bob both my husband's and my parents were open with each of us and our siblings and we were so grateful that all was in order and we knew their wishes when we needed to take care of their estates.  There was no arguing or difficulties because all had been decided and discussed in advance.  We will all die, with luck after enjoying old age, and this is a gift we can give our children:  make this part of our lives easier for them.
Jul 25, 2014 9:50PM
My plan is simple:  spend my last dime and die the next morning.
Jul 28, 2014 9:53AM
My dad, before he passed away nine years ago, made sure mom was well taken care of. She has dementia now and has had the best care. We were able to afford a care giver to take care of her, then when she got a little worse, she was able to live in a very nice assisted care facility and now an up scaled nursing home. She is 87 now and has the best care. She may live until she is 90 since her body is fairly healthy but, not her mind. All the money that was savings is gone now and all there's left is the house and some land she inherited from granddad and that's been in all three of our names since dad passed away. My brother has power of attorney and handles the money part of the estate and I handle her other needs like clothing..ect. The youngest sister does absolutely nothing for her now and before mom needed a caregiver she took close to $10,000 maybe more from her. She now says mom isn't really there and she really sees no point in visiting her since she can't talk to her or recognizes her at times. She may live to regret that someday on down the road. But, my brother and I go to see her a lot and she is still our mother. When mom does pass away, my brother and I know the younger sister is going to be a problem. But, she's already taken what she wanted from her house anyway. Sadly, this happens a lot to others.
Jul 28, 2014 9:09AM
Myad has insisted that we were all up-to-date on his and Mom's situation for the past 15 years or so.  Every time we visit, he brings it up, to the point that weare all kind of 'okay - wha't s changed?'.  But I DO understand that he worries that something will catch us unaware, and should be thankful that he keeps us in the loop. I wish us kids were as responsible as our parents are!
Jul 28, 2014 11:37AM
I just told my parents if they die with one dollar in the bank that was one dollars worth of fun they missed out on.
Jul 28, 2014 11:26AM

A family member of mine had a much different issue; not enough assets and a health issue that has caused an early retirement in their early 60's.


They had health insurance, but PPOs only cover so much. 20% of $500,000 with bills still coming.... and now this person is going to be released needing in home care part time. Adult children (lazy working BASTARDS!! shameful a-holes have full time CAREERS!) cannot provide care, as they are working and have kids of their own. The PPO does not cover ANY of the in home care giving.


So, the adult kids are scrambling to figure out what to do, how to find out what little assets (and they ARE little because many boomers expect medicare and social security to cover everything and are not saving) are available.


Aging parents need to think about what they will do when they get older, maybe think about long term care insurance, burial plans. I had this conversation with my mom, she got furious with me. Sorry, but the average funeral these days is 7-10k. With two kids that will need college very soon and two parents that NEED to plan, I can't pay for EVERYTHING.


I am not sure where MSN gets that people have all these ASSETs. Do people REALLY have money these days?

Sometimes care-giving can be an honor and not necessarily a responsibility...At least from my experiences.

But any rate, sometimes it's difficult for a parent to give up their power and allow an adult child to give them, "the talk."
Finding a way for the parent to retain that power like allowing them to pick the time and day for the conversation can go a long way...


Oh Casey!!

"Some parents said they avoid the financial talk because they don't want their children to count on receiving an inheritance"

Jul 28, 2014 10:46AM

I've served as the personal representative for my parents affairs as well as for my wife's mom's affairs.   My folks didn't talk to each other about money ... much less to my sister or I.   It was a nightmare trying to determine first - just what assets they had and second - jumping through all the hoops necessary to actually gain control of those assets once we discovered them.   IIt was just dumb luck that  discovered nearly $15K worth of assets via "" nearly 2 years after we had initially closed their estates.  


My wife's mom situatioin was a completely different story - her assets were well identified, and all her accounts were appropriately titled to allow us to gain control without a problem after her passing.   


While the talking about teaching their kids about responsible money management are giving good advice - they're missing the point of this article completely.  Parents that don't provide information regarding what assets they have and arrange to make the transfer of those assets as simple as possible after their passing are leaving their children a mess to try to address after they are incapacitated or gone.  

Jul 28, 2014 8:42AM
If the Kid's are interest then have the talk....however most kid's don't give a plug nickel what is going on with the parent or their money.
Jul 28, 2014 9:22AM

And here I thought this was going to be a story about parents telling their 'adult children' to get a *bleeping* job and make their own way in the world.

Nope, I'm on MSN, this is about lubing up the rents to cough up the dough to the little bastards so they can spend it for them in their old age.

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