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Preparing for 'The Other Talk' With Your Adult Children

Midlife couples should take steps to seamlessly shift money responsibilities to their kids when the time comes. Here's how.

By Tim Prosch | November 5, 2013
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Tim Prosch is the author of AARP's The Other Talk: A Guide to Talking With Your Adult Children About the Rest of Your Life and president of the marketing firm, Contact Points, Ltd. He previously taught at Northwestern University's Kellogg School of Marketing.

One of the most important conversations you have with your children is what is euphemistically called “The Talk,” the one about the birds and the bees. But there is another equally critical time in your kids’ lives when you need to sit them down to talk about the facts of life.

I call it “The Other Talk.”

This time, it’s not about the beginning of life. It’s about your last years of life and the issues and decisions and role reversals that you and your family need to confront while you are still able to lead the conversation.

“The Other Talk” is designed to help you and your family have an honest dialogue about the four essentials for the rest of your life:
  • Financing your uncertain future
  • Selecting the best living arrangements
  • Getting the medical care you need
  • Taking charge at the end of your life
But before you and your spouse are ready to sit down with the family to have The Other Talk, the two of you need to put a mechanism in place that shifts financial responsibilities from you to your kids with as little drama as possible.

By building that mechanism with your children now, it will look and feel like (and will in fact be) prudent planning, rather than a fight over financial control.

(MORE: How to Talk With Your Adult Children About Your Inheritance)

Once you have settled on which of your children you want to help you manage the finances and the child has agreed to take on that responsibility, you need to make your choice known to the family.

Then, set up face-to-face meetings with this child and your financial advisers, if you have any. The purpose is to get everyone acquainted and clear about your financial strategies and tactics.

If you don’t have a financial planner, discuss with your child the possibility of your hiring such a money adviser. Outsourcing some financial decision-making and execution may bring your child some useful expertise, while reducing family friction.

(MORE: 9 Ways to Make Things Easier on Your Survivors)

Next, you should move on three fronts, and I urge you to act quickly:

Step 1. Establish a Financial Power of Attorney

To begin, you should execute a financial power of attorney, which is basically a written, signed, and notarized document through which the parents give the designated child the authority to manage the parents’ money — the right to do everything from writing checks to selling securities. Powers of attorney can be effective immediately or upon incapacity.

I would strongly encourage you to get to this document as soon as possible.

Power of attorney documents are usually drafted by lawyers, but they don’t have to be. You can find templates on a variety of websites.

(MORE: The Bill of Rights for Parents of Adult Children)

Step 2. Simplify Your Finances

Chances are, your financial papers are all over the place. You’ll help your kids out by consolidating your bank, brokerage and investment accounts.

It’s also useful to simplify your finances structurally. For example, you could have monthly checks, such as dividends and pensions, deposited automatically in your bank account.

Similarly, you could put as many bills as possible on auto-pay (including utilities, house of worship pledges and ongoing charity donations).

Since many of your documents and your protocols for accessing your financial and digital assets are inside your computer, create a list of your logins, user names, passwords and answers to security questions for as many electronic relationships as you can think of. Then, put this information in a secure place, such as your safety deposit box.

Step 3. Transfer the Roles Between Your Spouse or Partner and You

In preparation for discussing financial role reversal in The Other Talk, one area that often gets overlooked is the potential need to shift responsibilities from one spouse to another if one becomes incapacitated or dies. You’ll want to prepare for this.

Let’s say you have been handling the bill paying and your partner has been the hands-on investor as your nest egg began to grow.

You should now give each other a tutorial and details about where the key financial records are.

Once you’ve both been briefed on each other’s roles, determine the trigger points that will prompt the other partner to take over.

Since this transfer of roles likely means that one partner is taking on both bill paying and investing, he or she should determine how much responsibility to retain personally, how much to pass on to the kids and how much to turn over to an outside expert.

These determinations will have important implications for the kids, so they should be part of the Other Talk when you’re ready to sit down with them and have it.


This article is adapted from AARP’s The Other Talk: A Guide to Talking With Your Adult Children About the Rest of Your Life by Tim Prosch © McGraw-Hill Education
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