by Rick Kahler

Involving adult children in financial planning can greatly smooth the transition if they ever need to take over your finances and step in as your financial decision makers. Use these tips to involve your children in your financial planning with your financial advisor.

I remember my mother shuttling three kids to simultaneous and overlapping doctor appointments, music lessons, Boy Scout events, school, and athletic events with timing precise enough to make an air traffic controller jealous. As parents, my wife and I had our turn as taxi drivers. And like many of our contemporaries, our time is soon coming to help shuttle parents to their activities and appointments.

As parents age, many adult children begin to not merely provide taxi service but to accompany parents to appointments, especially doctor visits. This is often helpful for both generations.

Yet it’s much less common for children to sit in on their parents’ meetings with financial advisors. In almost 35 years as a financial planner, I can count on one hand the clients that have taken the initiative to involve adult children in their financial review meetings.

This is something I now recommend. At a minimum, it’s wise to regularly include children who are designated in powers of attorney or as executors in estate planning. I advise involving them in meetings with attorneys, accountants, and financial advisors long before a health event demands they take over your financial affairs.

If this transition happens suddenly, it can be emotionally and financially painful. I have witnessed parents’ meticulous financial planning undone in almost an instant by children thrown into a situation where they have complete decision-making authority but no education or preparation to help them use it well.

In such instances, the advisor often becomes the target for the children’s displaced anger and fear around being thrust unprepared into this difficult role.

Actively involving adult children in meetings with legal and financial advisors can greatly smooth the transition when they do need to step in as the decision makers. By attending several years of meetings, children gradually become educated on the intricacies involved in many estate plans and investment portfolios.

Here are some tips to bring children into your relationship with an advisor.

1. Start slowly.

While a gradual education of your children on the particulars of your financial affairs can pay significant dividends, that doesn’t mean it is easy. Both generations may be uncomfortable at first.

One option is to start with a discussion about the parents’ general philosophy around managing money and their plans for their estate. Then the conversation can gradually proceed to more specifics.

2. Make it easy.

Probably your adult children are busy with jobs and families of their own. Offer to bring financial meetings to them via technology. A host of options can allow them to participate remotely.

3. Be clear on confidentiality issues.

Before bringing children into any meeting, discuss with your financial advisor the degree of disclosure and specificity you desire.

4. Pay attention to emotional as well as financial issues.

Disclosing to adult children the intricacies of parents’ financial affairs can be overwhelming and fraught with difficult emotions for both parents and kids. Although it is seldom expressed, perhaps the strongest reason for not discussing estate plans with family members is fear.

It’s natural for parents to be afraid that children will be angry or disappointed, will build too much on their expectations for an inheritance, or will be resentful of other heirs.

Beyond that, some family situations are complicated by such factors as stepfamily issues, difficult relationships, or children with widely differing capabilities around money. In these cases, it may be helpful to bring a financial therapist into the picture.

Involving adult children in aging parents’ financial affairs and meetings with advisors is not always easy. Yet the benefits for both parents and children make it well worth the effort.

• Taking Over Your Parents’ Finances
• Providing Equal Financial Assistance to Adult Children
• Legal Documents You Need In Your 50s

Reviewed May 2023

About the Author

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at KahlerFinancial.com. Contact him at [email protected].