When should one share financials with their children?

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oldfort
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Thu Aug 20, 2020 10:51 am They might not even know that mom and dad have $600K equity in the house, and may assume it's just mortgaged to the max like everybody else's.
Everybody isn't mortgaged to the max. Something like 40% of homes don't have a mortgage at all. Of the 60% with a mortgage, about one in four of those is considered equity rich meaning the loans secured by the property are less than 50% of the market value. In areas where property prices tend to appreciate, the equity rich percentage is higher. In San Francisco, 57% of homes with a mortgage are equity rich.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Thu Aug 20, 2020 11:05 am
FIREchief wrote: Thu Aug 20, 2020 10:51 am They might not even know that mom and dad have $600K equity in the house, and may assume it's just mortgaged to the max like everybody else's.
Everybody isn't mortgaged to the max. Something like 40% of homes don't have a mortgage at all. Of the 60% with a mortgage, about one in four of those is considered equity rich meaning the loans secured by the property are less than 50% of the market value. In areas where property prices tend to appreciate, the equity rich percentage is higher. In San Francisco, 57% of homes with a mortgage are equity rich.
Yes, but my point was that the kids likely would not know that mom and dad have paid off a substantial portion of the mortgage (assuming that mom and dad don't open their financial ledger to the kids each month).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
oldfort
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Re: When should one share financials with their children?

Post by oldfort »

FIREchief wrote: Thu Aug 20, 2020 11:11 am
oldfort wrote: Thu Aug 20, 2020 11:05 am
FIREchief wrote: Thu Aug 20, 2020 10:51 am They might not even know that mom and dad have $600K equity in the house, and may assume it's just mortgaged to the max like everybody else's.
Everybody isn't mortgaged to the max. Something like 40% of homes don't have a mortgage at all. Of the 60% with a mortgage, about one in four of those is considered equity rich meaning the loans secured by the property are less than 50% of the market value. In areas where property prices tend to appreciate, the equity rich percentage is higher. In San Francisco, 57% of homes with a mortgage are equity rich.
Yes, but my point was that the kids likely would not know that mom and dad have paid off a substantial portion of the mortgage (assuming that mom and dad don't open their financial ledger to the kids each month).
I'll make two more points and then bow out of this thread. Kids may know more than you think. Did mom or dad ever mention making an all cash offer on a home or what downpayment they were putting down? The CSS profile provides a comprehensive look at your finances including home equity. Refusing to fill out the CSS Profile says a lot too. Suppose there's a fatal car accident and the plaintiff's attorney is trying to decide whether to accept the quick insurance settlement or go to trial and potentially collect personal assets. He doesn't have access to bank statements or 401k balances, at least till it gets to a debtor's exam. He might look at public property records, the defendant's job and normal comp for that level in their industry, cars, homes, etc. and make some assessment of the defendant's income and net worth. That's where the whole insure umbrella up to your net worth or 2x idea comes from. The idea is the plaintiff is more likely to settle when you have higher insurance limits than estimated(not actual) net worth. It might not be an exact science, but on average it's going to get the plaintiff's attorney into the right ballpark. Kids can do the same. To some extent, it's irrelevant what the kids know for sure. They will have perceptions and those perceptions will influence attitudes and behavior.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

oldfort wrote: Thu Aug 20, 2020 11:38 am I'll make two more points and then bow out of this thread. The CSS profile provides a comprehensive look at your finances including home equity. Refusing to fill out the CSS Profile says a lot too.
Okay, if we're talking about parents with a kid entering college, you may be on to something here. Hopefully you realize that for many on the forum, they either don't have kids going to prestigious colleges and/or their kids are past the age when such documents would need to be submitted. I don't think we're necessarily talking about parents in their thirties with kids approaching college. For self made millionaires, at that point in life, they likely haven't fully realized the fruits of their labors/investments.
Suppose there's a fatal car accident and the plaintiff's attorney is trying to decide whether to accept the quick insurance settlement or go to trial and potentially collect personal assets. He doesn't have access to bank statements or 401k balances, at least till it gets to a debtor's exam. He might look at public property records, the defendant's job and normal comp for that level in their industry, cars, homes, etc. and make some assessment of the defendant's income and net worth. That's where the whole insure umbrella up to your net worth or 2x idea comes from. The idea is the plaintiff is more likely to settle when you have higher insurance limits than perceived(not actual) net worth. It might not be an exact science, but on average it's going to get the plaintiff's attorney into the right ballpark. Kids can do the same. To some extent, it's irrelevant what the kids know for sure. They will have perceptions and those perceptions will influence attitudes and behavior.
Well, I will suggest that if one's kids are so nosey that they start to behave like private investigators to try to secretly determine mom and dad's net worth; than there are likely issues that transcend this thread. Are they going to "confront" mom and dad with the findings of their investigation and demand acknowledgement that they will receive a huge inheritance and therefore no longer have to work? I'm guessing that for many parents, that might be about the time they start looking into charity options as beneficiaries.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
delamer
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Re: When should one share financials with their children?

Post by delamer »

michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am
FIREchief wrote: Wed Aug 19, 2020 1:44 pm

Interesting article. The following sure sounds like it's describing a lot of Bogleheads. 8-)

The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
michaeljc70
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Re: When should one share financials with their children?

Post by michaeljc70 »

delamer wrote: Thu Aug 20, 2020 11:59 am
michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am

The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
In my county, you can see the original and any subsequent loans. The values are original. So if I had a $400k mortgage when I bought 20 years ago it doesn't show that I might owe $5k, $50k or $250k currently. If they didn't miss any payments or make extra payments (you'd be guessing) I suppose you might be able to calculate the current balance. It would be further complicated with an adjustable rate mortgage.
phxjcc
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Re: When should one share financials with their children?

Post by phxjcc »

WHERE the money is should be documented in hard copy form to the executor SUCH THAT THE EXECUTOR KNOWS WHERE THAT INFORMATION IS AT ALL TIMES.
WHAT the assets are should be related to the executor.
WHO to contact for each asset is helpful.
WHY the asset was chosen may be helpful to the executor.

However, I firmly take the position that HOW MUCH should never, AS IN EVER, be discussed with the heirs.

What are you hoping to accomplish?

I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.

Further, If your heirs are not astute enough to guess at your legacy, then why do you feel the need to share?

Money was never discussed by my parents to me--however at their demise I could guess, within 10%, their net worth.
delamer
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Re: When should one share financials with their children?

Post by delamer »

phxjcc wrote: Thu Aug 20, 2020 2:30 pm WHERE the money is should be documented in hard copy form to the executor SUCH THAT THE EXECUTOR KNOWS WHERE THAT INFORMATION IS AT ALL TIMES.
WHAT the assets are should be related to the executor.
WHO to contact for each asset is helpful.
WHY the asset was chosen may be helpful to the executor.

However, I firmly take the position that HOW MUCH should never, AS IN EVER, be discussed with the heirs.

What are you hoping to accomplish?

I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.

Further, If your heirs are not astute enough to guess at your legacy, then why do you feel the need to share?

Money was never discussed by my parents to me--however at their demise I could guess, within 10%, their net worth.
This mostly comes across as you not trusting your darling daughter to be discreet and wise about with whom she shares information.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

delamer wrote: Thu Aug 20, 2020 11:59 am
michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am
oldfort wrote: Thu Aug 20, 2020 10:25 am

The article contradicts itself somewhat. It starts by saying most of their wealth is in the form of home equity and retirement accounts. It goes on to say how many millionaire households wouldn't be considered millionaires if you exclude home equity. Home equity is an outside appearance. If someone lives in a $150k home, then $150k is the upper bound on their home equity.
I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
delamer
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Re: When should one share financials with their children?

Post by delamer »

FIREchief wrote: Thu Aug 20, 2020 3:20 pm
delamer wrote: Thu Aug 20, 2020 11:59 am
michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am

I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Original balance of each mortgage and any subsequent refis.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

delamer wrote: Thu Aug 20, 2020 3:19 pm
phxjcc wrote: Thu Aug 20, 2020 2:30 pm I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.
This mostly comes across as you not trusting your darling daughter to be discreet and wise about with whom she shares information.
I wouldn't want "discreet and wise." I would want "nobody." Knowing that the world we live in ain't perfect, I wouldn't count on that..... Most of us don't expect our kids to be perfect, just forgiven. No need for "forgiveness" if there is nothing to pass along in the first place. 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

delamer wrote: Thu Aug 20, 2020 3:21 pm
FIREchief wrote: Thu Aug 20, 2020 3:20 pm
delamer wrote: Thu Aug 20, 2020 11:59 am
michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am

If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Original balance of each mortgage and any subsequent refis.
That's interesting. In my county, none of that is public info. Just who holds the deed, which in many cases is a living trust.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Matahari
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Re: When should one share financials with their children?

Post by Matahari »

I am in communication with cousins who are "interested" in their parents' financial condition because the cousins want to be prepared in the event that they need to step in and help with assisted living, long-term nursing care or final expenses. These cousins are younger and are still saving for their own retirement and kids' college expenses.

By all appearances, the parents are in good financial condition because they live comfortably-well in retirement and, pre-pandemic, traveled regularly. However, the question still concerns my cousins because specific information is not known. The cousins believe that their parents are responsible but are still left to speculate whether their parents have planned with sufficient cushion to pay for old-age and end-of-life care.

Parents who prefer to hold their financial information close to their vest should consider, at least, having this conversation with their adult children so that their children can plan for their own retirement and children's college expenses without this added concern.
michaeljc70
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Re: When should one share financials with their children?

Post by michaeljc70 »

I didn't read every post (but most) and didn't see this mentioned. Most of what I inherit from my parents (unless there are unforeseen circumstances) will be in the form of IRAs. Having an idea of what I might inherit (as I stated above, I have a good idea) would help a lot in tax planning. For example, I might do Roth conversions now (or in the near future) if I know RMD's from inherited IRAs would push me into a higher tax bracket in the future. Inherited IRAs could push someone that didn't expect it into a higher IRMAA in retirement. Of course, this is not something that would be particularly useful to a kid in their 30s or 40s but more for kids in their 50s or 60s with parents taking RMDs.
trueblueky
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Re: When should one share financials with their children?

Post by trueblueky »

Three cases:

I prepare taxes for DD and know where things are. He's 90; I'm to be executor. Much of his assets will transfer to me/sibs TOD. I'll need to sell the cars if he still has them. Sibs can divvy the dishes and such.

I prepare taxes for an elderly widowed relative. She has me do them so her children don't know how much she has. She has two houses full of stuff no one will want. I will probably help the executor with where the accounts are.

I'm to be executor for unmarried SIL, and have asked her for years to make a list of accounts in case it's needed. No luck on that. I know her finances are complicated since she's mentioned a trust (likely not needed) and a financial advisor. She lives several states away. Good news is she is younger than I am, so I will probably dodge that one.
Gnirk
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Re: When should one share financials with their children?

Post by Gnirk »

Matahari wrote: Thu Aug 20, 2020 5:53 pm
Parents who prefer to hold their financial information close to their vest should consider, at least, having this conversation with their adult children so that their children can plan for their own retirement and children's college expenses without this added concern.
I have assured my daughters that I have enough to pay for long term care expenses and will not be a financial burden to them. I'm putting the finishing touches on "The Book" which includes:
What to do in case I'm unable to handle my finances or personal care.
What to do in case of my death.
List of all financial accounts, numbers, contacts, and beneficiaries on the accounts.
List of all credit cards and what expenses are charged to them.
List of all expenses I pay, with account name, number, and phone number and how it is paid, including medical insurance.
Name and phone number for social security and my small state pension.
List of Savings Deposit box contents, box number, location. Their names are on the SDB account. And where to find the key.
List of all accounts, including social media, with user name and password.
Current month's summary of all accounts and value of assets in the accounts.
My will, DPOA for financial and medical, and Health Care Directive.
"The Book" will be in a locked file drawer and they know where I have put the key.

Anything else I should include?
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

Gnirk wrote: Thu Aug 20, 2020 9:17 pm
Matahari wrote: Thu Aug 20, 2020 5:53 pm
Parents who prefer to hold their financial information close to their vest should consider, at least, having this conversation with their adult children so that their children can plan for their own retirement and children's college expenses without this added concern.
I have assured my daughters that I have enough to pay for long term care expenses and will not be a financial burden to them. I'm putting the finishing touches on "The Book" which includes:
What to do in case I'm unable to handle my finances or personal care.
What to do in case of my death.
List of all financial accounts, numbers, contacts, and beneficiaries on the accounts.
List of all credit cards and what expenses are charged to them.
List of all expenses I pay, with account name, number, and phone number and how it is paid, including medical insurance.
Name and phone number for social security and my small state pension.
List of Savings Deposit box contents, box number, location. Their names are on the SDB account. And where to find the key.
List of all accounts, including social media, with user name and password.
Current month's summary of all accounts and value of assets in the accounts.
My will, DPOA for financial and medical, and Health Care Directive.
"The Book" will be in a locked file drawer and they know where I have put the key.

Anything else I should include?
That looks like a great list. I also have a final section that outlines some major things I used to have but no longer do. Life insurance, savings bonds, closed 401k accounts, etc. Intent is to not have anybody wasting time looking for something they know I used to have.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Matahari
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Re: When should one share financials with their children?

Post by Matahari »

Gnirk wrote: Thu Aug 20, 2020 9:17 pm
Matahari wrote: Thu Aug 20, 2020 5:53 pm
Parents who prefer to hold their financial information close to their vest should consider, at least, having this conversation with their adult children so that their children can plan for their own retirement and children's college expenses without this added concern.
I have assured my daughters that I have enough to pay for long term care expenses and will not be a financial burden to them. I'm putting the finishing touches on "The Book" which includes:
What to do in case I'm unable to handle my finances or personal care.
What to do in case of my death.
List of all financial accounts, numbers, contacts, and beneficiaries on the accounts.
List of all credit cards and what expenses are charged to them.
List of all expenses I pay, with account name, number, and phone number and how it is paid, including medical insurance.
Name and phone number for social security and my small state pension.
List of Savings Deposit box contents, box number, location. Their names are on the SDB account. And where to find the key.
List of all accounts, including social media, with user name and password.
Current month's summary of all accounts and value of assets in the accounts.
My will, DPOA for financial and medical, and Health Care Directive.
"The Book" will be in a locked file drawer and they know where I have put the key.

Anything else I should include?
You have certainly done a very thorough job of preparation and record keeping. The ongoing task is to keep The Book current.

The theme I'm following as I prepare for our aging, diminished capacity, and eventual demise is to simplify. If there are duplicate accounts, I have been combining them; for instance, I have consolidated IRAs. The accounts I have not yet touched are because of employment-related and tax considerations but I will eventually tackle those as well. As I combine assets and close accounts, I make sure that all TOD and beneficiary designations are still in order.

If you want certain heirs to receive items of sentimental or financial value, you can put together a list outside of your will and update the list as and when you choose. Retain the list with your will.

If you have designated one of your daughters as your executrix, you should consider informing all the siblings about your choice and the reasons for the selection so as to forestall questions and minimize disharmony.
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wander
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Re: When should one share financials with their children?

Post by wander »

Nah, children should depend on themselves. They will know when we pass. :annoyed
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Sandi_k
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Re: When should one share financials with their children?

Post by Sandi_k »

Gnirk wrote: Thu Aug 20, 2020 9:17 pm
Matahari wrote: Thu Aug 20, 2020 5:53 pm
Parents who prefer to hold their financial information close to their vest should consider, at least, having this conversation with their adult children so that their children can plan for their own retirement and children's college expenses without this added concern.
I have assured my daughters that I have enough to pay for long term care expenses and will not be a financial burden to them. I'm putting the finishing touches on "The Book" which includes:
What to do in case I'm unable to handle my finances or personal care.
What to do in case of my death.
List of all financial accounts, numbers, contacts, and beneficiaries on the accounts.
List of all credit cards and what expenses are charged to them.
List of all expenses I pay, with account name, number, and phone number and how it is paid, including medical insurance.
Name and phone number for social security and my small state pension.
List of Savings Deposit box contents, box number, location. Their names are on the SDB account. And where to find the key.
List of all accounts, including social media, with user name and password.
Current month's summary of all accounts and value of assets in the accounts.
My will, DPOA for financial and medical, and Health Care Directive.
"The Book" will be in a locked file drawer and they know where I have put the key.

Anything else I should include?
Great list.

- Do you have a cemetery plot?
- Do you have preferences for your service/funeral plans? Burial vs. cremated?
- Any military honors?
Gnirk
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Location: Western Washington

Re: When should one share financials with their children?

Post by Gnirk »

Matahari wrote: Thu Aug 20, 2020 9:51 pm
Gnirk wrote: Thu Aug 20, 2020 9:17 pm
Matahari wrote: Thu Aug 20, 2020 5:53 pm


Anything else I should include?
You have certainly done a very thorough job of preparation and record keeping. The ongoing task is to keep The Book current.

The theme I'm following as I prepare for our aging, diminished capacity, and eventual demise is to simplify. If there are duplicate accounts, I have been combining them; for instance, I have consolidated IRAs. The accounts I have not yet touched are because of employment-related and tax considerations but I will eventually tackle those as well. As I combine assets and close accounts, I make sure that all TOD and beneficiary designations are still in order.

If you want certain heirs to receive items of sentimental or financial value, you can put together a list outside of your will and update the list as and when you choose. Retain the list with your will.

If you have designated one of your daughters as your executrix, you should consider informing all the siblings about your choice and the reasons for the selection so as to forestall questions and minimize disharmony.
Thank you, and Firechief for sharing your ideas. I appreciate them.
Gnirk
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Re: When should one share financials with their children?

Post by Gnirk »

Sandi_k wrote: Thu Aug 20, 2020 11:47 pm
Great list.

- Do you have a cemetery plot?
- Do you have preferences for your service/funeral plans? Burial vs. cremated?
- Any military honors?
Thank you.
Yes, I have a cemetery plot; the deed is in the aforementioned safety deposit box.
Burial and cremation directions are included in my will.
No military honors.
NotWhoYouThink
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Re: When should one share financials with their children?

Post by NotWhoYouThink »

The bank probably won't let them open the safe deposit box if a) the bank knows you have died, and b) no one has been appointed by the probate court as executor. So nothing needed to bury you should be in that box.

With Covid slowing everything down, it might take quite some time to get a death certificate now, which will delay settling many estates.
michaeljc70
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Re: When should one share financials with their children?

Post by michaeljc70 »

FIREchief wrote: Thu Aug 20, 2020 3:20 pm
delamer wrote: Thu Aug 20, 2020 11:59 am
michaeljc70 wrote: Thu Aug 20, 2020 10:48 am
oldfort wrote: Thu Aug 20, 2020 10:46 am
delamer wrote: Thu Aug 20, 2020 10:42 am

I don’t understand what you mean by “outside appearance.”
If someone's a millionaire because they have $750k in home equity, then their home value has to be at a minimum $750k. Living in a $750k home vs $150k home is a visible sign of wealth aka "outward appearance."
But how do you know they don't have 2 mortgages on their house? I don't know how much equity anyone in my neighborhood has. I wouldn't consider how much debt someone has an "outside" thing that you can glance at and see.
In my state, all deeds and mortgages on a property are posted on a searchable online data base. So it’s pretty easy to figure out what someone’s home equity is.

But, in general, you are right.
Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
It lists the original principal amount of each mortgage. You can look at the note to see the actual terms also.
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backofbeyond
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Re: When should one share financials with their children?

Post by backofbeyond »

I struggled greatly with this one. I'm one of those guys that grinded out savings & invested monthly, kept my cost down and pretty much kept quiet about my financials. I think I qualify for one of those millionaire next door slots. However, I have one daughter that likes to spend, she's in her early 20's now. Sent her off to college a few years back and she boomeranged on us after only 3 months. Doesn't seem interested in going back to school and is working as a bartender at a beach bar.

I had no intentions on enlightening her that her parent are millionaires until she had matured. As she thinks all millionaires live in expensive house and drive new shiny cars. (I drive a 2005 Pontiac). So she equates wealth with spending. However, like others noted about, she applied for college financial aid and thus required our financial status. She was shocked when she found out. Her exact words were: if we (ha) are millionaires, why are we living in this dump. :shock:

Since then, my DW and I have shared more about our Trust, Wills and POA. Our Trust stipulates that if we both die, she won't come into her own until 30, which she actually took better than we thought she would. She also won't get all of our holdings, 25% go to other relatives and friends.

On the otherside, my father began sharing his net worth with me when I was 16. Each year he would provide a Net Worth Statement (which looking back was vastly inflated (RE holding ended up being 1/3 of what he thought they were). And he made me the Trustee of his Trust and POA in my 20s. In the end, I inherited less than 3% of my wealth from him, but his lessons were priceless.

Each family dynamics are different.
The question isn't at what age I want to retire, it is at what income. - George Foreman
JackoC
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Re: When should one share financials with their children?

Post by JackoC »

hnd wrote: Thu Aug 20, 2020 10:48 am I've had numerous conversations with "well off" people in regards to inheritance and work ethic. I think most realize that their children understand that there is potentially a large sum of money available to them at some point. And I think there are a few who have worried that if they know that amount, will my children even try?

But this is a parenting preparedness problem which obviously who wants to get into that whole ball of wax. I want my children to know that nothing is guaranteed. There are unlikely scenarios where i lose everything! so be prepared with your own volition.

But I think the other thing is i don't want my children to have a work ethic that keeps them slogging away unsatisfied in their jobs, keepign them from their families, while knowing that life is short and they could be spending it doing something they really enjoy and it is likely that there will be monetary support for them on the back end.

If I've won the game, i want to

A) give my children the knowledge that I am willing to support them in working hard at some endeavor that may not be lucrative enough to fund college for my grandchildren or their own retirement in a large way. Whether thats philanthropic endeavors or whatever.

B) allow them to enjoy the fruits of my labors with me. A good friend of mine's father died (mother had died a long while prior) and left his 2 sons a very large chunks of money. In letters he wrote both of them, he lived frugally in retirement so that he could leave them this money. Both were heart broken. They've of much rather have had more special moments with their father on vacations or other use of that money and been left nothing then not having their father yet also having this large chunk of money. Everyone is different but this spoke to me in how I want to live if i ever "win"
Great summary. You have to put the question in a context that's consistent with your general view of the world. Maybe some people think the ideal situation for their kids is that they have nothing to start with as adults and focus non-stop on accumulating wealth the rest of their lives. Because that's what the parents did. Or because that's just 'a morally superior way of life' in the parents' worldview. But not everyone thinks that. And there's a lot of room in between 'start with nothing and see how much you can accumulate by the time they bury you, that's how to live, period!' and 'never lift a finger again once you realize you'll get a substantial inheritance'. There are a lot of potentially positive outcomes to sharing family wealth, before or after you go, allowing hard working children to direct their hard work more to the benefit of society than themselves directly for example, just avoid the real suffering of financial worries (some people believe suffering is necessary to achieve virtue, others don't), enjoy family wealth together (like on family vacations). There are many positive possibilities alongside the standard anecdotes about 'trust fund babies I know who don't want to work'. And some of those anecdotes are influenced by envy I believe, as discussions of people with a lot of money by people without are in general.

Also as with everything else people tend to put it in terms of their own situation. Accumulating a nest egg of a million or few by late middle age is an achievement people are justified in being proud of IMO. However that's still not enough to make it highly likely already grown kids will inherit a lot depending on parent lifespan, future spending including old age care, the number of kids, etc. besides future investment returns. People who have already split off significant amounts of money in irrevocable trust for kids ('trust fund babies' if you want to gratuitously put those people down), is a different situation. Those kids *are* going to get that money just depending on non-disastrous investment returns. The former situation seems fairly common here, though a small % of all families, latter situation is not that common even here I think.
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Re: When should one share financials with their children?

Post by hnd »

Yeah i grew up with a family of boys whos grandfather built an empire here in the midwest. The man made his children the managers of his company and the majority of them did well, one of the children became a black sheep if you will. All the grandchildren were given a few million dollars at the age of 25. but they had stipulations like they had to graduate college and they had to get a real job (not at the families corporation for a few years). of the 4 children I know and grew up with, all 4 of them (who knew they were getting this money, and 3 of them came from the lazy sibling) are all doing amazing things in fields that they never would of attempted to get into if they didn't know that money was theirs at 25. They likely would of slogged away at their families company not truly following their dreams. We had this conversation a few year ago when one of them came back from singapore where he's built a family and a business there. He attributed his journey to knowing what was available and taking some chances.

My other buddy was like, my dad loved fishing and fished out of a 5000 dollar boat that would always have issues and always be in the shop and sometimes we'd have to alter trips because of it. He was like my dad could of easily purchased the most expensive bass boat there is with all the accessories and it wouldn't of put but a small dent in our inheritance. But he wanted to leave it to us. and they were like in the end we respect his wishes because thats how he wanted it to be and thats fine. (now he fishes out of that super awesome bass boat lol)

I think obviously not every path is for every situation and there are probably plenty of times where having your kids knowing what will be left to them has been disastrous regardless of how well someone feels they've raised their children but i think its great to weigh all options and not just do something because of some other anecdote.
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Re: When should one share financials with their children?

Post by phxjcc »

FIREchief wrote: Thu Aug 20, 2020 3:25 pm
delamer wrote: Thu Aug 20, 2020 3:19 pm
phxjcc wrote: Thu Aug 20, 2020 2:30 pm I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.
This mostly comes across as you not trusting your darling daughter to be discreet and wise about with whom she shares information.
I wouldn't want "discreet and wise." I would want "nobody." Knowing that the world we live in ain't perfect, I wouldn't count on that..... Most of us don't expect our kids to be perfect, just forgiven. No need for "forgiveness" if there is nothing to pass along in the first place. 8-)
^^This.

This is risk mitigation.

It is not anything but risk mitigation.

If someone else does not desire to practice risk mitigation, I have no argument with them.

However, MY assets—-my choice.
Period.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

phxjcc wrote: Fri Aug 21, 2020 1:22 pm
FIREchief wrote: Thu Aug 20, 2020 3:25 pm
delamer wrote: Thu Aug 20, 2020 3:19 pm
phxjcc wrote: Thu Aug 20, 2020 2:30 pm I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.
This mostly comes across as you not trusting your darling daughter to be discreet and wise about with whom she shares information.
I wouldn't want "discreet and wise." I would want "nobody." Knowing that the world we live in ain't perfect, I wouldn't count on that..... Most of us don't expect our kids to be perfect, just forgiven. No need for "forgiveness" if there is nothing to pass along in the first place. 8-)
^^This.

This is risk mitigation.

It is not anything but risk mitigation.

If someone else does not desire to practice risk mitigation, I have no argument with them.

However, MY assets—-my choice.
Period.
:sharebeer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
eco_eco
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Re: When should one share financials with their children?

Post by eco_eco »

backofbeyond wrote: Fri Aug 21, 2020 8:02 am I struggled greatly with this one. I'm one of those guys that grinded out savings & invested monthly, kept my cost down and pretty much kept quiet about my financials. I think I qualify for one of those millionaire next door slots. However, I have one daughter that likes to spend, she's in her early 20's now. Sent her off to college a few years back and she boomeranged on us after only 3 months. Doesn't seem interested in going back to school and is working as a bartender at a beach bar.

I had no intentions on enlightening her that her parent are millionaires until she had matured. As she thinks all millionaires live in expensive house and drive new shiny cars. (I drive a 2005 Pontiac). So she equates wealth with spending. However, like others noted about, she applied for college financial aid and thus required our financial status. She was shocked when she found out. Her exact words were: if we (ha) are millionaires, why are we living in this dump. :shock:

Since then, my DW and I have shared more about our Trust, Wills and POA. Our Trust stipulates that if we both die, she won't come into her own until 30, which she actually took better than we thought she would. She also won't get all of our holdings, 25% go to other relatives and friends.

On the otherside, my father began sharing his net worth with me when I was 16. Each year he would provide a Net Worth Statement (which looking back was vastly inflated (RE holding ended up being 1/3 of what he thought they were). And he made me the Trustee of his Trust and POA in my 20s. In the end, I inherited less than 3% of my wealth from him, but his lessons were priceless.

Each family dynamics are different.
I agree - every family is different and has a different approach to money. In my family we have had this same problem. Until we reached middle age my sister had never met a dollar bill which she wanted to hold on to and for some reason thought she was entitled to have everything in life paid for rather than having to work herself to pay for it.

As a result my sister put an tremendous amount of pressure on my widowed mother to pay for her lifestyle. In her 50s she has gotten past this point, but there was a risk she would have spent all of my mother’s money simply because she didn’t really understand how money works. I think my father keeping how much money the family had secret was really unhelpful as if my sister had known there wasn’t a limitless well to draw on she might have understood things earlier.

Fortunately before he died my father put all of his and my mother’s money in a trust. My mother is now 77 and for. The last several years I have been one of the trustees helping her with the finances. I take a silent role, but act as a sounding board if she wants to discuss an investment. I’m pleased that I’m involved to avoid the risk of someone coming along and taking advantage of her as she gets older and more vulnerable (she’s 77 now).
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Re: When should one share financials with their children?

Post by Outer Marker »

Full disclosure. I haven’t read the entire thread.

It sounds like the inheritance is large, potentially life altering for your kids. If you are in your 70s they are not exactly teenagers, and you’ve been able to witness yourself work ethic and how they have done.

I don’t think there’s anything to be gained by keeping secrets and having a grand unveiling after the funeral reception.

If you’ve done well and have more than enough, why not start gifting some of it now so you can see it enjoyed...
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Re: When should one share financials with their children?

Post by BillWalters »

My parents had a family meeting with all the kids when they were in their early 70s. No numbers, but explained their estate plan, who was in charge of what, etc. Each parent was on marriage #2, with kids from prior marriages, and their estate plan was specifically designed to prevent the all too common late in life “next” spouse getting all the money scenario. We greatly appreciated both the foresight and the communication.
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Re: When should one share financials with their children?

Post by cashboy »

i see two aspects to your question:

(1) dollar amount:

i would suggest simply stating that you can take care of yourself and your wife financially for the rest of your lives and that your children do not have to worry about that. dollar figures are not required to make such a statement. this allows your children to know they will not need to help you; they can then make their own plans with their own assets having peace of mind.


(2) documentation:

as far as having everything documented, and having it where it can be found, yes, but you do not have to go over each and every asset and their worth.
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Re: When should one share financials with their children?

Post by retire2022 »

FIREchief wrote: Thu Aug 20, 2020 3:20 pm Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Firechief, you live in a bubble, go to Zillow or your local county website, all mortgage documents are public documents.

Also Spoeko.com and other private websites as well as US states census has all of this information, while you can't get to last cent you can get pretty close.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

retire2022 wrote: Sat Aug 22, 2020 12:30 pm
FIREchief wrote: Thu Aug 20, 2020 3:20 pm Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Firechief, you live in a bubble, go to Zillow or your local county website, all mortgage documents are public documents.

Also Spoeko.com and other private websites as well as US states census has all of this information, while you can't get to last cent you can get pretty close.
Yikes!! Okay, just to humor you, I checked my last house on Zillow. I see a sales price. I see no information telling me the size of the mortgage the buyers took out or what the current balance is. I also checked our County assessor's website. All it shows is property tax balances. Is my "bubble" blocking my vision?? :P

I also checked your spoeko.com and got a virus warning. You must have meant Spokeo.com. I checked that too. Still no mortgage information. What am I missing here? :confused
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
delamer
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Re: When should one share financials with their children?

Post by delamer »

FIREchief wrote: Sat Aug 22, 2020 12:40 pm
retire2022 wrote: Sat Aug 22, 2020 12:30 pm
FIREchief wrote: Thu Aug 20, 2020 3:20 pm Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Firechief, you live in a bubble, go to Zillow or your local county website, all mortgage documents are public documents.

Also Spoeko.com and other private websites as well as US states census has all of this information, while you can't get to last cent you can get pretty close.
Yikes!! Okay, just to humor you, I checked my last house on Zillow. I see a sales price. I see no information telling me the size of the mortgage the buyers took out or what the current balance is. I also checked our County assessor's website. All it shows is property tax balances. Is my "bubble" blocking my vision?? :P

I also checked your spoeko.com and got a virus warning. You must have meant Spokeo.com. I checked that too. Still no mortgage information. What am I missing here? :confused
My experience is that not all states/cities/counties post mortgage information online, but they do post purchase prices and tax assessments.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

delamer wrote: Sat Aug 22, 2020 12:46 pm
FIREchief wrote: Sat Aug 22, 2020 12:40 pm
retire2022 wrote: Sat Aug 22, 2020 12:30 pm
FIREchief wrote: Thu Aug 20, 2020 3:20 pm Does that data base indicate the balance (or original principal amount) of each mortgage? Or, does it just list who the lien holders are (if any)?
Firechief, you live in a bubble, go to Zillow or your local county website, all mortgage documents are public documents.

Also Spoeko.com and other private websites as well as US states census has all of this information, while you can't get to last cent you can get pretty close.
Yikes!! Okay, just to humor you, I checked my last house on Zillow. I see a sales price. I see no information telling me the size of the mortgage the buyers took out or what the current balance is. I also checked our County assessor's website. All it shows is property tax balances. Is my "bubble" blocking my vision?? :P

I also checked your spoeko.com and got a virus warning. You must have meant Spokeo.com. I checked that too. Still no mortgage information. What am I missing here? :confused
My experience is that not all states/cities/counties post mortgage information online, but they do post purchase prices and tax assessments.
Yep. I've known that for years (ever since the dawn of the internet). The point that has made by several in this thread, yet apparently is still lost on some, is that in many places the fact that a person lives in an $800K house doesn't tell anybody a single thing about their net worth. They're just as likely to have a $700K mortgage and $50K of credit card debt as they are to have $800K in equity.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
NotWhoYouThink
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Re: When should one share financials with their children?

Post by NotWhoYouThink »

FIREchief wrote: Sat Aug 22, 2020 1:57 pm
Yep. I've known that for years (ever since the dawn of the internet). The point that has made by several in this thread, yet apparently is still lost on some, is that in many places the fact that a person lives in an $800K house doesn't tell anybody a single thing about their net worth. They're just as likely to have a $700K mortgage and $50K of credit card debt as they are to have $800K in equity.
Exactly. Our neighbors with multiple luxury cars moved out when he went to federal prison for embezzlement. Our neighbors who did the whole house remodel moved out when the housing market crashed in 2009. We have a 15 year old minivan, no mortgage, and plenty of assets. You can't always tell what someone has by what they spend, or how close they are to insolvency.

Just look at all the celebrities trying to stay relevant during the pandemic. While they are not getting paid they are bleeding cash and might have to simplify their lifestyles soon.

Our county website does not show mortgages either. You can see the purchase price and when/whether they have paid taxes. There may be a subscription site that has more info, but the publicly available one does not.

Also, as my son's scout leader once told him - some people think they are worth a lot of money just because they have a lot of money.
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Re: When should one share financials with their children?

Post by HueyLD »

BillWalters wrote: Fri Aug 21, 2020 6:46 pm My parents had a family meeting with all the kids when they were in their early 70s.
I am confused. If the kids were in their 70s, were the parents in their late 90s or over 100?
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

Now I'm curious. I would appreciate it if somebody would either post or PM me a county/state that does post up to date mortgage balances as public information. I would really like to see this.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: When should one share financials with their children?

Post by fatcoffeedrinker »

hnd wrote: Thu Aug 20, 2020 10:48 am I've had numerous conversations with "well off" people in regards to inheritance and work ethic. I think most realize that their children understand that there is potentially a large sum of money available to them at some point. And I think there are a few who have worried that if they know that amount, will my children even try?

But this is a parenting preparedness problem which obviously who wants to get into that whole ball of wax. I want my children to know that nothing is guaranteed. There are unlikely scenarios where i lose everything! so be prepared with your own volition.

But I think the other thing is i don't want my children to have a work ethic that keeps them slogging away unsatisfied in their jobs, keepign them from their families, while knowing that life is short and they could be spending it doing something they really enjoy and it is likely that there will be monetary support for them on the back end.

If I've won the game, i want to

A) give my children the knowledge that I am willing to support them in working hard at some endeavor that may not be lucrative enough to fund college for my grandchildren or their own retirement in a large way. Whether thats philanthropic endeavors or whatever.

B) allow them to enjoy the fruits of my labors with me. A good friend of mine's father died (mother had died a long while prior) and left his 2 sons a very large chunks of money. In letters he wrote both of them, he lived frugally in retirement so that he could leave them this money. Both were heart broken. They've of much rather have had more special moments with their father on vacations or other use of that money and been left nothing then not having their father yet also having this large chunk of money. Everyone is different but this spoke to me in how I want to live if i ever "win"
+1. That's the balance we want to strike. Keep them motivated, but letting them know there will likely be help available if needed.
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Re: When should one share financials with their children?

Post by sport »

FIREchief wrote: Sat Aug 22, 2020 2:35 pm Now I'm curious. I would appreciate it if somebody would either post or PM me a county/state that does post up to date mortgage balances as public information. I would really like to see this.
In my county, the Fiscal Officer shows assessed values, sale transactions, taxes, etc. https://fiscalofficer.cuyahogacounty.us/en-US/REPI.aspx
The County Recorder shows documents that have been recorded for each parcel such as deeds, mortgages, liens, etc.
https://recorder.cuyahogacounty.us/sear ... archs.aspx
The only thing you need to look up a particular property is the Permanent Parcel Number and you can search for that by owner or address at the Fiscal Officer site.

The mortgage documents do not show the balance, but they show the amount of the mortgage and the date it was implemented. Releases of paid-off mortgages are also shown.
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wander
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Re: When should one share financials with their children?

Post by wander »

HueyLD wrote: Sat Aug 22, 2020 2:29 pm
BillWalters wrote: Fri Aug 21, 2020 6:46 pm My parents had a family meeting with all the kids when they were in their early 70s.
I am confused. If the kids were in their 70s, were the parents in their late 90s or over 100?
It's more like the parents were in their early 70s. But, English is my second language, so I maybe wrong. :D
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Re: When should one share financials with their children?

Post by delamer »

sport wrote: Sat Aug 22, 2020 3:37 pm
FIREchief wrote: Sat Aug 22, 2020 2:35 pm Now I'm curious. I would appreciate it if somebody would either post or PM me a county/state that does post up to date mortgage balances as public information. I would really like to see this.
In my county, the Fiscal Officer shows assessed values, sale transactions, taxes, etc. https://fiscalofficer.cuyahogacounty.us/en-US/REPI.aspx
The County Recorder shows documents that have been recorded for each parcel such as deeds, mortgages, liens, etc.
https://recorder.cuyahogacounty.us/sear ... archs.aspx
The only thing you need to look up a particular property is the Permanent Parcel Number and you can search for that by owner or address at the Fiscal Officer site.

The mortgage documents do not show the balance, but they show the amount of the mortgage and the date it was implemented. Releases of paid-off mortgages are also shown.
Generally, if you know the terms of the loan and the beginning balance, you can estimate the remaining balance.

HELOCs are tricky, though, since you don’t know if they’ve drawn against.
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Re: When should one share financials with their children?

Post by Marengo »

It really depends on the nature of the relationship. If you think your kids will want you to die to inherit your wealth, maybe you want to keep it a secret.

My father, who is in his early 70s, has been fairly transparent with me about their finances for a few reasons. First, my mother would need me to manage her finances if he were to die first. Second, I’m the executor of their wills. We have a close family, and my sibling and I have no intention of fighting over any inheritance, so I don’t think my father has any reason to be secretive about his financials.
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Re: When should one share financials with their children?

Post by GCD »

I only read the first page of this thread, but it seems my wife and I are in the minority around here. Our kids are in high school and we have been completely transparent with our children regarding our finances since they were about 15 years old. We do a year end net worth review and they see the accounting down to rounded thousands of dollars.

We have regular weekly financial discussions where we work our way through various financial books and discuss them. We have many informal discussions as well. We think being transparent and using our own finances as a learning tool is a positive thing. We have open and honest discussions about why we don't have a pool even though we have 75x what it would cost to install a pool sitting in various accounts. It has prompted discussions about why we live in the neighborhood we do when other parents with the literal exact same jobs (federal government) live in a nicer neighborhood.

All in all, I think it has been a win. Check back with me in 40 years.
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Re: When should one share financials with their children?

Post by flaccidsteele »

Supposedly people are good parents with good kids, but not good enough to trust their kids to put their own financial self-interest aside 🤣
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Re: When should one share financials with their children?

Post by smitcat »

phxjcc wrote: Thu Aug 20, 2020 2:30 pm WHERE the money is should be documented in hard copy form to the executor SUCH THAT THE EXECUTOR KNOWS WHERE THAT INFORMATION IS AT ALL TIMES.
WHAT the assets are should be related to the executor.
WHO to contact for each asset is helpful.
WHY the asset was chosen may be helpful to the executor.

However, I firmly take the position that HOW MUCH should never, AS IN EVER, be discussed with the heirs.

What are you hoping to accomplish?

I am an old operations manager/risk analyst and see, perhaps, too many problems from darling daughter telling her lover that Mom and Dad own x houses, have y in the bank and z with Schwab. And he tells his friends, etc, etc, etc...ad nauseitem.

Further, If your heirs are not astute enough to guess at your legacy, then why do you feel the need to share?

Money was never discussed by my parents to me--however at their demise I could guess, within 10%, their net worth.

I am an old operations manager as well - and we have no problems sharing a larger proportion of our finances with our daughter.
Money is not a secret in our family and speaking about how it works in life is a big advantage in learning how to use it.
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FIREchief
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Re: When should one share financials with their children?

Post by FIREchief »

flaccidsteele wrote: Sun Aug 23, 2020 1:13 am Supposedly people are good parents with good kids, but not good enough to trust their kids to put their own financial self-interest aside 🤣
This is confusing. Are you suggesting that parents who don't share account balances somehow don't trust their kids? Or, that these parents are placing their own self-interests above the interests of the kids? Wouldn't that be the parents who don't live within their means but spend their last dollar on their last day (or expect their kids to bail them out when they go broke)?

I also don't recall anybody claiming to be "good parents with good kids." I'm not sure how you are planning to measure "good." OTOH, I have seen a lot of parents in this thread primarily concerned about the welfare of their kids long term (i.e. saving enough to keep them out of the streets when they are sixty and also not providing dis-incentives to become self-sufficient when they are in their twenties). I have to ask. Have you actually raised kids yourself? To the age of 30 and beyond?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Nords
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Re: When should one share financials with their children?

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Parman wrote: Mon Aug 17, 2020 12:18 pm Just wondering if there are any thoughts, opinions, wisdom on an appropriate time in life to share ones financials with their grown children? My wife and I are both 72 years of age and expect to be around for another 15 years so this is not a deathbed inquiry. Just wondering if there is any value in sharing with the kids what might be their inheritance someday? Would this information be helpful in planning their financial future? I do not wish to stifle their own personal efforts to plan and save for their futures. Our Trust and Will spells out that our two kids are to receive equal shares of estate, they just do not know the size of estate. Thanks for any thoughts.
My spouse and I will be 60 years old soon, and we’ve already started the turnover to our daughter in her late 20s.

My father and his father both blindsided their sons with a lack of financial planning (let alone sharing info). My grandfather’s neglect (due to dementia) was far more difficult to straighten out, yet my father told me for nearly 25 years that he wouldn’t do that to us sons... and then he developed Alzheimer’s.

It’s important to me to avoid doing that to my spouse and our daughter. (They certainly agree.) Since my spouse will start her Navy Reserve pension in another year, she’s already taken over our household bills and she’s managing our rental property. (I’m still labor.) I’ll do our income-tax returns as long as I can, and then she’ll outsource those to a tax preparer or our daughter.

We reached financial independence when our daughter was seven years old, and we’ve been sharing our financials with her since then. We kept it simple and age-appropriate through middle school. (“Enough for everything we need for the rest of our lives, and a little extra for fun.”) When she was in high school we shared more details. They looked like “really big numbers” to her, but that was the teachable moment about making our assets last for life. We also let her know about our “In Case of Emergency” folder with all of our account numbers and passwords. If she needed to step in during our disability or death, she had all the info to get started.

Today she’s married to a great son-in-law and they’re raising our baby granddaughter. They’ve maintained a high savings rate since their teen years, and they’re on the cusp of their own FI. A couple years ago we completely opened the books for them. We all share our Personal Capital account where they can see all of our assets and our cash flow.

A couple years ago we started updating our wills and our durable powers of attorney. We learned that estate planning is relatively easy but disability planning is much more complicated. Hawaii has transfer on death and payable on death laws, and even transfer on death deeds for real estate, but there’s very little for disability beyond a DPOA. As we went through the process we realized that we’d need a combination of a revocable living trust and DPOAs. It was especially important to my spouse that there not be any gatekeepers (doctors, lawyers, probate judges) in the way of our daughter handling our assets.

Today my spouse, me, and our daughter are all co-trustees of our revocable living trust. (The trust only holds our home and our rental property.) Our daughter has a DPOA on all of our investment accounts, and they’re also all TOD/POD. Finally she’s a joint owner on our checking accounts.

When my spouse reaches her 80s, she’s going to turn all the finances over to our daughter in exchange for a debit card with a monthly limit. That way our daughter can help keep an eye on everything and step in if necessary.

Yes, our daughter could strip our accounts and bankrupt us. (That would be illegal since she’s a fiduciary co-trustee for the benefit of the grantors, but still.) The lawyer was rightfully concerned. Yet even if my spouse and I were too slow (or too disabled) to stop the financial abuse, we could still (slowly) rebuild our wealth from our pensions and Social Security. We intend to keep gifting our three heirs while we’re all still able to discuss it, and hopefully no misbehavior will occur.

In my opinion, that risk is far better than the caregiver stress I went through to be appointed my father’s conservator and then dealing with the probate court’s benevolent oversight-- for more than six years.

I have more details in this post:
https://the-military-guide.com/family-estate-planning-for-your-disability/
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