How to talk to aging parents about their financial affairs
There comes a point when adult children should be asking certain questions of their parents to ensure that their financial affairs are in order. As parents age, achieving financial independence for retirement is a primary objective and effective planning should start well ahead of time. Similarly, planning for the smooth succession of assets on death is critical to maintaining family harmony through a difficult time. Here is a list of questions adult children should be asking their parents, now, to better plan for retirement and beyond.
- How recently have your investments been reviewed to ensure the current portfolio reflects your retirement needs and risk tolerance?
- Have you prepared financial projections to ensure that you will/continue to have sufficient cash flow during retirement to support your lifestyle?
- Does your retirement plan contemplate various contingencies which could impact your lifestyle (e.g., additional health care, etc.)?
- What are you doing to take advantage of tax planning opportunities to reduce or defer taxes (e.g. income splitting, enhance capital gains exemption and CPP or OAS planning)?
- Do your wills reflect your current wishes for executors, legacies, and treatment of major assets on your death?
- Have you considered estate planning ideas (e.g., a secondary will for private company shares, an estate freeze, life insurance, etc.) to save taxes on death?
- Do you have Powers of Attorney for property and personal care and do they reflect your current wishes?
- Who are the key members of your financial advisory team (i.e., accountant, lawyer, investment advisor, etc.)?
- Where are important documents stored and are there clear instructions to make it as easy as possible to manage your estate?
- Should we have a family meeting so you can tell us about some of your plans because who knows what the future might bring?
Newport Private Wealth manages the financial affairs of high-net worth families. We work across multiple generations to preserve and enhance net worth and better prepare young adults to manage finances in the years ahead.
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