There have obviously been many terrible things which have come out of the Covid pandemic, and I certainly would not wish to belittle in any way the challenges people have faced, but I wonder whether some good may come out of it?
What I’m thinking about is ….. MONEY
The great taboo we are so reluctant to talk about within our families.
I’ve been a financial planner for 25 years, but my parents have never spoken to me about the money they have, let alone ask for my advice about how to get higher interest on their cash savings or better understand their investments.
From conversations with clients I know that my parents approach is common. People are often very happy to give money to their children and grandchildren to fund university education, buy a car, help with purchasing a new property etc.
But that’s completely different to sitting down as a family to talk about what the money is there for and how to use it for the benefit of all at various stages of each person’s life. Not discussing the hopes and fears of each generation is not helping anyone.
The greatest of these fears may well be ‘what happens if I need care?’ From a financial perspective for most people that will be a question of how decreasing physical and/or mental health can be paid for.
In my experience ‘children’ of older clients want the best care possible for their parents and are happy to accept the impact of this on their inheritance. But other than the casual throw-away line ‘we don’t want your money’ this is not discussed seriously.
But, it’s not just about the potential cost, it is also about how you want to live the later years of your life. If you don’t have a meaningful conversation about this it is probable the question will only be dealt with when the need becomes critical and any decision is made under great time pressure and emotional stress. This is not the basis for a good outcome!
Because we’ve all had more time on our hands over the last few months it’s been possible to think whether Wills are up-to-date, whether Powers of Attorney are in place to cover financial and health matters to provide certainty that your wishes will be carried out if you are unable to do so yourself.
There have also been conversations about where the money is, ‘just in case any thing happens to us’, so what was previously embarrassing has been seen as important.
It may be that because people have often had more time these conversations have felt less pressured, or it may be that because they have had to be carried out remotely rather than face-to-face this has made it less painful. But whatever the reason it is essential we carry on with these conversations, and ideally in a way which allows more time to be open and honest about how money can be used to ensure the best life for your entire family:
- How you would like to live the remainder of your life as independently and securely as possible?
- Does gifting to children, grandchildren or even great grandchildren while you are around to see the benefits make sense?
- What kind of world you would like your family to live in?
- What legacy you would like to leave behind – both financially and emotionally?
It is essential to obtain expert advice about an area in which most people only have a hazy idea because it has not yet become a major problem. It’s also crucial to have an independent perspective, not because there is generally conflict between family members, but rather that these are incredibly emotional decisions, which may be difficult to work through alone.
We are here to help.
– Ian Kemp