Insights for Your Journey

Suzanne is 55 years old and the oldest of 3 siblings. We were recently helping craft a retirement income plan when she mentioned something that was causing anxiety…a concern we hear frequently.

“I’ll have to manage my parents’ finances at some point, but they don’t like to talk about this stuff. It’s stressful knowing I’ll be responsible for this but not knowing where things are and what they want!”

She felt lost, asking herself question after question.

  • Do they have a will?
  • Am I responsible for overseeing the finances if they are unable?
  • Are they at risk of paying too much in taxes?
  • What impact do they want to make with the wealth they pass on?
  • Are they worried about their financial legacy?

If you’ve felt a bit like Suzanne, you’re not alone. Talking with parents or other loved ones about estate and legacy planning can be uncomfortable. Survey after survey shows that many people will discuss almost anything before their finances. Though you have their best interests at heart, you might fear you’ll come across as a little too interested in their money.

But the cost to taxes and strain on family relationships can be high if we don’t have these conversations. So how can we balance these seemingly conflicting goals? How can we start healthy dialogue with parents about the financial legacy they want to leave?

It’s important to convey three values when having these conversations:

  1. Respect – This is your journey, not mine. I’m here to listen and learn what values and goals are important to you.
  2. Legacy – This is about far more than wealth. It’s about the legacy of values and impact you want to have.
  3. Advocacy – I’m here to do what I can to ensure your wishes are honored however I can.

With your values established, the right questions can open many doors. Questions demonstrate interest and can allay fears of ulterior motives. Choose an appropriate setting – some are more sensitive about privacy than others. Then, get started! Here are four steps and a few questions to ask along the way.

These four steps can help you approach this subject with parents or grandparents. If you’re wondering how to approach this subject with your children or grandchildren, check out 4 Steps for a Successful Estate Planning Talk with Your Family.

 

Step One – Break the ice

Starting the discussion was the hardest part for Suzanne, but she found a few of these questions helpful. You might use some or all of them, but questions like these can open the discussion about what’s most important to them:

  • What’s on your bucket list? What kinds of experiences do you want to have?
  • What opportunities do you wish you had as a kid that you would provide to others if you could?
  • What stories or lessons do you hope your grandkids or great grandkids hear from you? Anything specific to wealth and how you’d advise them to think about it?
  • What kinds of causes have you been involved with over the years? Which have been the most meaningful to you and where have you seen the most impact?
  • I’ve been working on some estate planning, deciding what we want to happen with what we don’t use during our life. How has this gone for you? What kinds of conversations have you had about this?

These questions helped Suzanne gain some awareness of her parents’ goals, dreams for their family, causes that are important to them…and more than a few memorable stories that shaped their lives. Specifically, she learned that her parents hoped to provide for their grandkids’ education and wanted to leave a gift to their local foodbank. They just hadn’t gotten around to discussing it.

 

Step Two – Uncover values

Suzanne could also see guiding values emerging in her parents’ stories. At this point, you might have a list of things they want to do, gifts they want to leave, or charities they want to support. But these connect to deeper heart issues for many. These questions can help get to the “why” of each goal:

  • You mentioned (goal/charity/lesson)…why is that important to you?
  • If you accomplished this goal, what do you imagine the impact would be?
  • How do you want to be remembered?

Connecting goals from Step One to heart-centered values enriches the picture of the impact they truly desire. Suzanne’s parents have been successful, but they struggled through college and wanted to relieve their grandkids of this financial burden. They also had close friends growing up who rarely had enough to eat and were supported by the generosity of their community. It became clear why they wanted their legacy focused in these areas.

 

Step Three – Learn what they’ve already done

With the “what” and “why” established, it’s time to discuss what steps have already been taken toward these goals. Suzanne found this more challenging because her parents didn’t quite know what they had set up. She used these questions to get a better idea of what had been done:

  • Lots of folks have exciting goals like yours but haven’t gotten around to putting a will or estate plan together. How has this gone for you?
  • Who’s on your tax, financial, and legal team? Do you feel like they understand these goals?
  • Who is responsible for overseeing these financial matters for you?
  • Who else knows about these goals you have for your legacy?
  • Tax and estate laws change all the time. When did you last review your plans?

Suzanne’s parents had met with an attorney but hadn’t finished preparing the legal instructions that would bring these goals into reality. She now knows who can help make sure the impacts they desire are well documented and will be executed according to their wishes.

 

Step Four – Establish next steps to ensure their goals are documented and tools are in place

With goals, values, and work-to-date covered, Suzanne wanted to clarify the next steps needed to ensure their intentions would be honored. These questions helped:

  • What’s on your estate planning “to-do” list already – things you plan to do but haven’t gotten around to yet?
  • In addition to your current team of professionals, who do you want to include in this discussion?
  • What challenges do you see to getting your dream plan in place?
  • How can I help you accomplish these goals?

Suzanne walked through these steps and ended with a clear understanding of her parents’ legacy goals and what was needed to finish their planning. And, to her surprise, they had fun discussing it! These steps could help you work through a similarly uncomfortable conversation. But…

 

What if they don’t want to have this discussion?

Despite your best intentions and efforts, what if they object? What if they are offended, put up walls, or aren’t open to the discussion? Once again, a few questions can help clarify:

  • My goal has been to learn more about what’s most important to you and your goals, but it seems like I haven’t communicated that. Can you help me understand where I miscommunicated?
  • Lots of people find this conversation uncomfortable…I certainly do from time to time. Do you feel that way as I’m asking these questions?
  • I’m concerned I won’t be ready to make sure your goals are honored with what you leave behind. What advice do you have for me?
  • I’ve talked with folks who haven’t had these conversations with their parents and didn’t know what they wanted with the wealth they left behind. Is that a concern for you?
  • At some point, if you’re not able to care for yourself or make your own decisions, I worry that I won’t be prepared to help without knowing your expectations ahead of time. What do you think about that?

Of course, you can’t force anyone to have a discussion they aren’t willing to have. If you’re still hitting a wall at this point, it could be best to let it rest for the time being. However, if this succeeds in opening the discussion, you can return to Step One above.

 

Empowering next steps

How did the conversation go? Did you find the same relief and clarity that Suzanne felt? If so, you may be asking “I’m not a pro at any of this…what should I do now?”

You may need a team of professionals to help take the conversation deeper. A comprehensive planning team like ours at Alterra can facilitate discussions about current laws, taxes, investments, logistics, and everything in between. The right team can help bring the best of intentions into reality.

Good questions are often the key to fruitful conversations. Start from a place of curiosity and uncover what’s important to them – their goals, values and vision. Then, it’s not about the money. Wealth is put back in its proper place as a tool to enjoy life, provide for loved ones, and impact causes you care about – for generations to come.

Alterra Advisors does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.

Mallory Hall - Alterra Advisors

Mallory Hall

CFP®, CPWA®
Financial Advisor

About the Author

Mallory brings more than a decade of experience in boutique wealth management and institutional finance to Alterra. A Pacific Northwest native, Mallory completed her degree in Finance at Seattle University and later earned Certified Financial Planner™ and Certified Private Wealth Advisor® designations. She credits that education to a wonderfully supportive extended family. As she tells it, her family’s unwaveringly support inspired her passion to pass this education on to others.

Mallory looks at her financial education as a life-changing gift that she shares with enthusiasm. She thinks math is fun, and markets are interesting, but the work of a financial advisor is about doing good for others. Mallory has a natural knack for the analytics, but she is motivated by how this skillset can be applied directly to improve the everyday lives of her clients. Because she stresses the educational role of a financial advisor, Mallory’s ultimate goal is to be a “multi-generational advisor” guiding a family’s assets and goals as they change from one generation to the next.

In her spare time Mallory loves exploring the outdoors with her family. She’s also a passionate supporter of her husband’s business where they craft custom frames for a wide range of fine art.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.

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