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As families gather this week for Thanksgiving dinner, some might have more on their plate than turkey, stuffing and pumpkin pie. Family gatherings can be an ideal time to dish up something extra: the money talk.
Admittedly, it can be an awkward conversation to initiate, mainly because most people don't like to talk about money. Or their future old age, much less their demise. Others fear their adult children are too nosy or only interested in the size of their inheritance.
"All those things contribute to a reluctance to talk about this, especially with their adult children," said Jane Clark, senior editor with Kiplinger's personal finance magazine in Washington, D.C.
But Clark said that's a mistake. "You want your kids to know how you want your estate handled. Or what you might need for old age. Or what they might expect from you, such as helping with a grandchild's college. It just gets everyone on the same page."
Depending on family circumstances, it could be discussing which sibling should handle Mom and Dad's finances or health care, if needed. It could be helping college kids figure out postgraduate finances. It could be spelling out end-of-life choices, including hospice care, memorial services, even where to find passwords for Facebook and other online accounts.
Patti Stathos, of Sacramento, Calif., a retired teacher, said she and her husband had such a conversation with her parents around a dinner table last summer. Rather than being awkward, it turned out to be refreshingly reassuring.
"We wanted to know so we could grant all their wishes when the time came. You always think you should have this conversation, but the timing was never right ... Afterward, we all agreed: 'How great it is that we're all talking about this.'"
Having a money conversation doesn't mean you need to open your bank statement and spell out how much is in your retirement or investment accounts. The point is to create some clarity so there aren't any surprises.
For instance, parents should let their children know about the existence of a will or trust and who's been designated as the executor or trustee.
"If you can tell your children what you've chosen and discuss it with them now, it can eliminate surprises and hurt feelings," said Trudy Nearn, an estate planning attorney.
Nearn, for instance, had elderly clients with grown children in their late 50s. Originally, the son was named as trustee to handle the parents' living trust, but years later the parents changed their minds and named their daughter. Only problem: they couldn't bring themselves to tell their son. When the parents died, Nearn had to inform the son that he wasn't in charge.
"It was horrible," recalls Nearn. "There were really hurt feelings and accusations. It would have been better if the parents had just been honest."
Calling a family meeting can be as formal or casual as you like, said Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation. "It's a great opportunity to talk, pass on your values, your family history. But it's also a chance for your kids to come together and say, 'Mom and Dad, we want to talk about this.'"
No matter whether it's broached by parents or adult siblings, the right tone is crucial. If adult kids come on too strong, it can sound like snooping into their inheritance or implying that Mom and Dad aren't capable of managing their own finances. Or well-meaning parents sometimes find that their kids are squeamish even thinking about losing Mom and Dad and brush off the topic.
Regardless of age, every adult over age 18 should have two documents - a power of attorney and an advance health care directive - that designate someone to make financial and health care decisions on their behalf, if necessary. Your kids should know where to find those documents in the event something happens to you.
They should also know the name of your bank or investment adviser, financial planner and estate planning attorney.
"And don't forget a list of your 'digital assets,' such as Facebook and other online accounts," said Eleanor Blayney, consumer advocate with the Certified Financial Planner Board, who compiled her own list recently and was "shocked" that she had more online accounts than asset accounts. The need for family members to know where to find your digital passwords came home recently, she said, when a friend's family member suddenly died but no one was able to close down his Facebook page.
The earlier money discussions start with young kids, the better, say personal finance experts.
Holiday gift-giving can be a place to start. As holiday TV ads start ramping up, Thanksgiving can be a chance to gently ease back kids' expectations. In some families, it's an occasion to pick individual names for gift-giving, set a dollar amount or encourage handmade presents, instead of store-bought.
Some like to emphasize "giving instead of getting," letting their kids help pick a family-focused charity like Christmas Promise or Book of Dreams to make a donation together.
With college-age kids, Blayney says, the holidays can be an opportunity for parents to discuss the financial implications of decisions they're making: changing majors, dropping out of school, getting a graduate degree, moving back home.
Far from creating dissension, having a family talk - whether it's finances or end-of-life wishes - can bring enormous peace of mind.
For Stathos, sandwiched between adult children in their 20s and parents in their 80s, knowing her parents' wishes is hugely comforting.
"It felt great to know that my parents were going to go home, think things over and write things down. It's a good feeling."