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How much do you let your adult children know about your finances.
Old 08-19-2015, 07:31 AM   #1
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How much do you let your adult children know about your finances.

I admit, I'm struggling with this one. Help/suggestions are appreciated.

So, I am a widow with two young adult sons (24, 21) at home. I admit they know next to nothing about my financial picture.

they do know about how much we spend to live as my late husband and I felt strongly about them learning about living expenses and how spending effects the family.

Both are college students, my oldest has a learning disability (Asperger's) but he does ok.

LOL, they are great kids, my youngest is not the poster child for responsibility which I'm afraid to admit because it always seems on internet boards everybody else's kids are mensa candidates that were mature from age 6.

So do I keep the information "general"? show them where the will, insurance and other papers are or do I let them know dollars and cents? (younger son would start entertaining ideas of blowing his inheritance on a stripper named Cinnamon but that's another story)
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Old 08-19-2015, 07:52 AM   #2
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There is zero reason for them to know the "dollars and cents" of your savings. Since they are home I would let them know the cost of supporting the household and when they graduate charge them rent if they still live at home.
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Old 08-19-2015, 07:54 AM   #3
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Oh, and Cinnamon is a nice girl who just ran into some trouble!
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Old 08-19-2015, 07:57 AM   #4
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I would let them know where to find will, papers and documents "in case" and, if so, let them know how their education is taken care of in the worst case.
If you are FI you may let them know that they can plan their life without being afraid to have you as a financial burden.
Other than that, I would play it by ear.
However, I would make sure not to exclude the younger one from information even if the older one seems to be more mature. Such differentiation could easily lead to conflicts between the brothers, even if the parent means well and has its reasons.
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Old 08-19-2015, 07:58 AM   #5
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We have not shared anything with our children. They are no dummies so between the facts that we retired in our mid 50s, live in a nice lakeside home, travel, etc they know we are not lacking for money, but they have no need to know the details at this point.
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Old 08-19-2015, 07:59 AM   #6
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I'd fill them in on need to know information. A lot depends on the size of your estate. If it's a lot, consider a trust with some restrictions. You really need to talk to a professional, a good estate planning lawyer or CPA.....pay them for a few hours but be very careful of anyone that wants to manage your money, now or after you're gone. You can go on the internet and find free packages of items you should list for others to have when your gone.....it can tell about bank accounts, stock ownership, where all important papers are and then you can leave it in your safety deposit box at the bank and tell your boys where its at.......As they mature, you should choose one of them or someone else to handle your estate.....they file all the paper work to close your estate.....pick the most mature and if it isn't extensive, they don't need any compensation. Again, ask your friends for a CPA or lawyer reference.....spend a few hundred bucks and you'll be happy you did. For this group to help you, you would need to provide much more info.
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Old 08-19-2015, 08:17 AM   #7
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I just say that we have "enough" to live on and that any inheritance depends on how many years we have to pay for Alzheimer's care, out of our remaining funds.
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Old 08-19-2015, 08:28 AM   #8
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Off topic, but now I have the song "Cinnamon Girl" swirling around in my head, which is good because I woke up with "Jessie's Girl" in my head...this is an improvement!

Sorry. Back to thread.
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Old 08-19-2015, 08:49 AM   #9
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We have not shared anything with our children. They are no dummies so between the facts that we retired in our mid 50s, live in a nice lakeside home, travel, etc they know we are not lacking for money, but they have no need to know the details at this point.
Same here. The kids are old enough and smart enough to piece together the big picture. But I haven't shared any details and have no such intention until there is a need. Every time I do something nice for them, or help them with a big purchase for their house, I sort of jokingly make them promise that they will take care of me in my old age since I spent all the money on them. Their reaction always makes me suspect that they think there's a lot more money than there really is.
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Old 08-19-2015, 08:53 AM   #10
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I stick to generalities at best. Specifics about where to find wills and papers if needed, but no details about financial holding except generally fine or generally struggling as appropriate.

As young people just starting their careers, knowing you have zillions and they have scratch is not helpful. Once they are employed and starting to save, knowing you became secure (again, not details) by hard work and saving and good investing might be helpful, but knowing specifics won't help. At the beginning of the slow exponential rise in saved assets, seeing the end result can be de-motivating instead of motivating. It's hard enough living in housing parents took a lifetime to build and not understanding the progression to get there.
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Old 08-19-2015, 08:55 AM   #11
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We deal with a daughter with bipolar issues. She remains relatively unstable and has a total lack of judgment when it comes to financial issues. She has her good days, and she has some bad days.

When children get into their twenties and under perfect conditions, it's time for them to step up and face their own responsibilities--and stand on their own two feet. Some young people just cannot take the next step in life, however.

Anyone of substantial means that has children that are incapable of being independent need to contact an estate attorney to setup a trust that will protect the children.

In our case, we'll probably setup a Special Needs Trust that provides just a minimal amount to go toward basic needs like utility bills, healthcare and rent. Such a trust can insulate our estate legally so it will be there for our daughter's long term needs.
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Old 08-19-2015, 08:58 AM   #12
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My daughter is 31. She isn't stupid so knows we are pretty well off. A recent gift for a house down payment and paying for her wedding, are good hints. Eventually, as we age we will bring her more into the know but at this point just where the papers are, etc. She is aware of the general terms of our wills that name her primary beneficiary and executor. I should give her a copy at some point, but we are relatively young so too early, I think.
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Old 08-19-2015, 09:06 AM   #13
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I wrote a letter to my daughter explaining where everything is and who she needs to contact in case something happens to me . I update the letter every few years .She knows I am financially okay but not to what degree .
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Old 08-19-2015, 09:07 AM   #14
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So do I keep the information "general"? show them where the will, insurance and other papers are or do I let them know dollars and cents? (younger son would start entertaining ideas of blowing his inheritance on a stripper named Cinnamon but that's another story)
It doesn't need to be all or nothing. You can start with generalities, and as they learn, grow and mature you can share more detail, gradually increasing their knowledge of and involvement in your finances.
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Old 08-19-2015, 09:18 AM   #15
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Thanks all,

It's been on my mind primarily because their dad died when he was 55, so I guess I'm more accurately aware that the unexpected can and does happened.

They both work part time. Our rule has always been the 25% rule. they have to put 25% into their 401K (if available) 25% goes to the house (we tell them it covers their car insurance etc) 25% goes to school/gas/car upkeep and the remainder can play with.

I did estate planning a few years ago when my husband passed.

I'll stick with showing them where the will is and making sure they have their two aunts phone numbers. they aunts are the executors of the wills and both are attorneys

Thanks again.
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Old 08-19-2015, 09:29 AM   #16
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I would also add, it doesn't benefit kids to think there is an inheritance coming.. I have neighbors that basically slack off and haven't really done anything with their lives, the wife uses her bipolar as an excuse to never work again.. all because both parents have money, they already have trust fund money from deceased parents and blatantly talk about when mom dies, well we can move into her beach home or sell it and we will be fine for life.

On the flip side, I honestly don't think my parents are fine, even though they say they are.. unless they got money from somewhere I'm not aware of, my mom is in trouble once my father passes.

So the moral is .. kids just need to know you really are financially ok and they don't need to worry about you. Other than that, it is best not to share.
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Old 08-19-2015, 09:38 AM   #17
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Off topic, but now I have the song "Cinnamon Girl" swirling around in my head, which is good because I woke up with "Jessie's Girl" in my head...this is an improvement!

Sorry. Back to thread.
This will really mess with you it has some funny parts in it.
What would you think of Rick Springfield as your psychiatrist?
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Old 08-19-2015, 09:46 AM   #18
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I would also add, it doesn't benefit kids to think there is an inheritance coming.. I have neighbors that basically slack off and haven't really done anything with their lives, the wife uses her bipolar as an excuse to never work again.. all because both parents have money, they already have trust fund money from deceased parents and blatantly talk about when mom dies, well we can move into her beach home or sell it and we will be fine for life.

On the flip side, I honestly don't think my parents are fine, even though they say they are.. unless they got money from somewhere I'm not aware of, my mom is in trouble once my father passes.

So the moral is .. kids just need to know you really are financially ok and they don't need to worry about you. Other than that, it is best not to share.
I don't think one size fits all. Depends on the kids. Your example is one side but mine would be the other. My daughter is very responsible, independent, and does not feel or act entitled. I plan on helping her financially while we are still alive, but her inheritance will still be fairly large. Since she is the executor and sole heir, it makes little sense, in my view, to keep her in the dark. As we and she gets older, I expect to bring her more into the loop. Even at some point, discussing investment decisions.
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Old 08-19-2015, 10:49 AM   #19
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We have two sons in early 30, and both are self sufficient, independent, living on its own. They were rise with understanding that we will provide full support for them until they finish college. We paid for their education, which they completed on time. (4 year college without any delays) We shared our financial situation with them without providing details(numbers). We assured them that our pensions are enough to maintain our current lifestyle. They are aware that we have savings and paid off house and other properties, and no loans. We told them that so they donít worry about our finances. We do not carry any life insurance. We also inform them that everything that will be left when we are gone will be divided 50/50 among them. How much will be left depends on our health and longevity. We do give them larger gifts on birthdays, and holidays, always equal for both of them, so there is no jealousy.
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Old 08-19-2015, 10:52 AM   #20
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I think it is good that you are treating the kids as responsible adults. I would go further and explain that, when they graduate, they will be expected to move out on their own, and that once the second one has graduated, you will be downsizing the home.

Depending on where they get jobs, you might even be relocating.

But with two lawyers as executors, you are good to go. Just make sure that they understand your wishes.

One of DWs cousins struck it rich in the oil patch. Both she and her husband died unexpectedly within a year of each other. Their daughter has handled all the wealth just fine. Home in Edmonton, winter home in Phoenix, summer home in Georgian Bay.

The only lifestyle change has been upgrading the summer home. She already had her own home and cottage, so only extra activity was selling her parents home in Fort McMurray and taking over the Phoenix place fulltime (she already used it).
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