Episode Transcript
[00:00:00] Speaker A: In this episode, we talk about why the holidays are not the ideal time to talk to your family about finances. Let's get started.
[00:00:07] Speaker B: Let's get some money from New Money, New Problems. It's the New Money New Problems, um, podcast. A show for successful professionals searching for.
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[00:00:26] Speaker A: Helping your family with money.
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I'm Brenton Harrison, and this is the New Money New Problems podcast.
[00:00:46] Speaker A: Hello, my name is Brenton Harrison of New Money, New Problems and your host for the New Money New Problems podcast. If, uh, you're watching on video, you are probably very confused because not only were we posting this episode a little late, but I also am not in the office. I am, um, uh, outside. I am in Colorado for the holidays with my in laws. If you're looking on video, I hope you at least check out the YouTube to see this backdrop behind me. But it's a nice day, It's a little loud in the house, so I figured it might be a little better for me to just do this episode in the fresh air. But the timing of this episode has to do with the holiday season. So I want to tell you, uh, what this is about. When you look at the financial advisor or the financial personality. Ah, landscape. Very rarely do you find a person or a personality who comes up with topics that nobody else has come up with before. Um, there are rules of thumb that really are just rules of thumb because somebody said it and then the second person, third person said it, and it becomes a rule of thumb. Some of them are great rules of thumb to have, but you also know that I don't believe in absolutes. So you'll see people who will post, uh, episodes and YouTube videos and reels about the perfect amount to spend on a house or why you shouldn't buy a house at all and why renting is the way to do it. You have people who will talk about the S&P 500 being the only investment that you need. And they didn't create that idea. Most likely it's something that they read somewhere else. They believed in the philosophy, they adapted it, and they inserted it into their content. And one of the areas where you find that very frequently that isn't discussed that much is when to talk about money and how to talk about money with your family. So I can say that over the years, I have seen several Financial advisors, including myself, adapt the philosophy and the mindset that when you have the opportunity to talk to your family about money, you should do so no matter what. Right? Like, how many opportunities do you have to have all the involved parties in a room and have a real conversation about finances? Not many. Right? If you're like me and you have a, ah, ton of cousins and you have siblings and you have parents and aunts and uncles, uh, we're not always in the same space and when we are, there are certain things that you want to get hashed out as quickly as possible. Uh, one example, I, um, have not talked about this on the podcast, but my grandmother, we've talked about the fact that she's not from this country, she's from Belize. And we all as a family, I mean, like almost 40 of us went to Belize this past spring. And while we were there, I was adamant about everybody who could apply for dual citizenship applying for dual citizenship. And there was information that we needed from my grandmother and there were steps that we needed my parents and her siblings to take in order for us, the second, or let's just say the third generation to get citizenship through my grandmother, then my parents and then so on and so forth. And I brought it up, everybody kind of just looked at me like, okay, yeah, yeah, we'll get on it. And there was no action that was taken. But it wasn't just that experience. When I tell you I have over the years seen just dozens of people who have tried to talk to their family members, their siblings, their parents about money, uh, their cousins, anybody who's involved in the conversation or should be involved. They might do it around the holiday season and they come back saying, it blew up in my face for a reason. Xyz. And to me that brings to mind, I don't know if you're familiar with the quote, a wise man changes his mind sometimes, a fool never does. But that's what I think of when I just go year after year telling people, hey, are you going to be home for the holidays? Do your parents have a will? Do you know, if they have long term care insurance? If they don't, you need to talk to them while you're home for the holidays. And the number of times that that hasn't worked out, it just puts me in a position where I don't want to be that foolish person who never changes his mind. So this holiday season I've been doing some thinking about why the holidays doesn't end up being the best time to talk to family about money. When conceptually, it should be the perfect time. Everybody who should be involved in the conversation is in the same room. And when I think about some of the specific experiences that have showed me, hey, this didn't work out too well, uh, for this person or that person, there are some common threads. One of those common threads when you're talking about the generation who you're asking about their planning or lack thereof, is guilt and shame. If you are listening to this podcast and you are under the age of 50 years old, you probably are a person, uh, who hopefully rightfully so, believes that your best financial years are ahead of you, that you have all the time in the world to do all this planning, uh, to leave generational wealth to your loved ones, to make sure that you've dotted all the I's and crossed all the T's. But every year you get closer to your retirement years. And you can ask anybody in their retirement years, they come quickly. You start to realize that there's less and less time left to do some of the things that you wanted to do all along. Now, that doesn't mean that there's no time left. We've met people who have become financially independent in their late 60s and early 70s. But if you're looking at the back half of your life and you're saying, I didn't take care of that will, I didn't save that money, I wanted to in my 401k, I didn't establish that rental property empire that when I was in my 30s and 40s, I thought I was going to establish. There can be a lot of shame, not just internally, but definitely when someone comes out the blue and asks you about the planning that you have done in order to leave an inheritance to the people you love. I will never forget a conversation I had with an uncle of mine who passed, who was like a father figure to me. Um, but I was sitting with my uncle and my aunts having a conversation about some planning decisions that needed to be made. And in the course of that planning decision, he was going to have to sacrifice something that he was planning to leave to his family as an inheritance. And for various reasons, I was saying, hey, I don't think this is the right financial move to keep this around. This is something that we need to consider letting go of in order to pursue something else. And while this is a person who has been like a father figure, who has reprimanded me in the past, who has spoken sternly to me in the past, the amount of anger that he had in letting Go of that thing was something that at the time I thought was disproportional. As a matter of fact, I felt as if he was mad at me and I was doing my best to counsel him about something that I thought was the best course of action. And in talking to him later about the conversation. But my aunt, shortly after that initial conversation, she said, you know, it's just tough. It's something where if you feel like you have something set aside and now you're coming to grips with the fact that you may have less than you had planned for, then you being the person that delivered the message doesn't mean that he's angry at you. He's angry at the message, and that's something that he's having to confront. And this may play out in your conversations where if you out the blue, with no foresight or advance notice say, what type of planning have you done? You may get an angrier response than you expected because there may be some internal guilt and shame about a lack of preparedness. Another common thread is the prodigal son element of this. You see this a lot in minority communities where there is anger from an elder generation, uh, when people ask about what type of life insurance they may have. We've talked about the term, oh, I only need enough to bury me and I don't want anybody to get rich off my death. There is a history behind why that type of philosophy has taken hold in minority communities. But the fact of the matter is there is an element where if somebody comes and asks about what is going to happen upon your death, it may not be received as foresight and proper planning. It may be perceived as you are trying to figure out how much you're going to get. When I die and I'm still here and I don't want to think about my death. So that's another element of the conversation that I think people or I, I won't even blame it on. People have discounted or underestimated when it comes to talking about family and money during the holiday season. And then lastly, the sibling slash cousin element. I only have one sibling. I have a bunch of cousins, but I also have the luxury of being a financial advisor and those siblings and those cousins showing some deferen to me when it comes to financial conversations. So this isn't something that I deal with this frequently, but I will tell you that several times I have had people say, I tried to bring this up and my cousins were angry about it, or my aunts and uncles are angry about it, or my Siblings were angry about it for various reasons. Now, some of those reasons may be that they're upset that you're taking the lead in the conversation when they feel like you shouldn't be the one taking the lead in the conversation. Some of it may be due to past elements of that relationship where they feel like there's been inequities and money is a part of it. But it may have something to do with some that happened when you were 10 years old or 16 years old that you're not aware of that that person is harboring. And money does an excellent job of bringing out the cracks in a relationship when it comes to who gets what or who is responsible for planning what. And you would be surprised. Even the guilt that's associated with the sibling not being in a position to take care of a parent if something were happening to them, or the anger that another one volunteers to do so. There are so many dynamics at play, and one of the ones that you may not think of that is worth considering is the fact that some people just don't have the comfort level thinking about, much less talking about the prospect of someone they love dying as others. So for all these reasons, when I see talking heads, including myself, telling you that when you go home for the holidays, you need to start the conversation about money with the ones you love, I am now retracting that statement and saying that I no longer believe the holidays is the right time to talk about money. But I do feel it's the perfect time to plan for the conversation about money. And after the break, I'm going to tell you how.
[00:10:17] Speaker C: This is the New Money New Problems podcast, a show for successful professionals searching for the tools they need to navigate financial opportunities and obstacles they've never seen. We'll be right back.
[00:10:31] Speaker B: Uh, are you wondering what new money problems you might be overlooking in your financial life? If so, we've got great news. We've crafted the New Money New Problems Gap Finder to identify potential weaknesses in your finances in areas ranging from budgeting, investments, insurance, and even the threat your extended family's finances could pose to your household. Please head to newmoneynewproblems.com gapfinder to complete it today. Again, that's newmoneynewproblems.com Gapfinder to take the assessment.
[00:11:14] Speaker C: You're listening to the New Money New Problems podcast. Subscribe now at new money new problems. Com. Welcome back.
[00:11:25] Speaker A: All right, here's how to take advantage of the holiday season to plan for the conversation with your family about money without actually Having to have that conversation during the holiday season. The first thing I want you to do is I want you to separate the two different parties at play into different camps. And here are those different camps. There's one camp that are the people that you're approaching about their planning. These are the grandparents, these are the parents. These are the elders in your generations that you are trying to make sure that they either have something in place or, if not, that you are assisting them in getting it in place. The second camp are the people who could be the beneficiaries or the people who are providing for or planning for in the absence of a plan. So those are your siblings, those are your cousins. Those are any of the interested parties at play where they are either going to be on the receiving end of some type of asset or the receiving end of the work in the event that there's been no planning done, that there's an incapacity and those people need to be provided for. That is the second camp of people. And they are really two different conversations. Now, you're not going to be perfect at this because, again, there's so many elements at play in these conversations that you can't plan for things that you're not aware of. When you have the conversation with the camp that's the beneficiary of the work or the asset, you first want to state your intentions. You want to let them know why. You want to have a conversation with the elder generation about money, and it doesn't have to be centered on how much you want to receive or hope to receive. Matter of fact, if you lead with that, that's going to probably lead to a rough conversation on the front end. Instead, you want to let them know about your concerns. These are things that I have seen with other families. When someone is incapacitated and there's no plan. We don't know if this person has insurance. We don't know what assets they have. We don't know what liabilities they have. We don't know what important documents they have in terms of wills and estate planning documents, and if they have them, where they're kept. And that causes me a significant level of stress and concern, not just for myself, but for what it could do to our relationships if we are stuck in this situation without proper planning. You also want to make it clear that you're not necessarily trying to take the lead in the conversation. You just have some things that you want to be addressed in some form of fashion, whether you are the lead or whether you are part of A team of people who are approaching this conversation. And once you have made that clear, you want to set some parameters, if not in the conversation. During the holiday season, maybe it is scheduling a separate, separate time with your siblings or cousins or loved ones to discuss what each of your role will be in that conversation. Does everybody want to be present during that conversation or would they rather not discuss it and just be kept up to date with any happenings? Is there anything that is of importance to the other parties that they want to make sure that is addressed as well? Because this is not just your conversation, it's everyone's conversation. You're not making the decisions during this part or with this camp, but you do want to set a time with this camp where you can have some questions, questions prepared, some concerns addressed for things like if something happened to mom and dad, who would be the one to take care of them physically? If something happened to mom and dad, who would be able to chip in financially, no shame, no guilt attached. If you want to be able to give that answer without it being shared with the entire group, let's figure out a way where that answer can be shared based on where you are right now. But this is something that we need to be aware of, and if that's the case, it's the case. But I would rather know that now, now, after they die, if they don't have specific intentions for how they want things dispersed, is there any particular thing of import that they have that you would want to stay claim to or something that you're not interested in maintaining? Maybe you don't want to keep the house and your siblings do. And if that's the case and the elder generation doesn't have a will or that will doesn't address what would occur in the event that there's one piece of property that maybe two or three people want to keep and one doesn't, how will that one person be compensated for their equity in that piece of property? Those are things that, if not addressed in those estate planning documents, can lead to disputes down the line. If they can be addressed before it occurs, I would prefer that you do so. But the most important thing that comes out of this conversation are, ah, parameters to when you have the money conversation, a set date and time for when that conversation will occur. Because without a date it will not occur. And you need to give yourself enough time when setting that date to make sure that all the interested parties have enough time to write down their list of questions and make sure that they are prepared when that time comes. Now the second camp are the generations that you're hoping did some planning, but maybe they haven't. And for that generation, you have to approach this even more delicately because of that guilt and shame element. So I would start the conversation with them by letting them know, hey, I want to, in the future, not right now, have a conversation about end of life or incapacity and what it means in terms of how you would like to be provided for and think that you may like to see upon your death. Again, framing it so that it's something that they can have some agency as compared to you just having a list of things that you want addressed. I'm concerned about your level of care if you're incapacitated and how we can plan for that. I want to make sure that upon your end of life, if there's something in particular that you want to occur that it's addressed, even if they've done some planning, put them at ease and say, I am not concerned about how much money I get or do not get. I just want to make sure that from a planning perspective, that things are taken care of, put them at ease to let them know that if they feel any particular way about what they have or do not have to pass on, that that's not what this conversation is about. It is about preparation and not inheritance. You also want to make sure that they have the opportunity. When we have this conversation, are there any particular things that you would like me prepared to discuss or learn about or hear about so that they have that agency as well in terms of what's discussed at that meeting? And they're not just getting peppered with questions they may feel uncomfortable answering. And I will tell you, there's no guarantee that they agree to do this. As a matter of fact, there are people in my family who are like, actively against talking about anything that has to do with end of life matters. My grandfather comes to mind. But the fact of the matter is you reach a point where you are not given the option and you may not even have the option of going back and getting that information, depending on the person's capacity. Over the past years, we've had loved ones who didn't give this information. And it's not even that they died before they could give the information. It's that they slipped into things like Alzheimer's and dementia and are just not in a position now to share information that we wish they had shared prior to. So when there is pushback, it doesn't guarantee a response. But you need to let them know I Understand that you have a hesitance to share, but this is something that is going to have to be dealt with whether you tell me the information or not. You having a discomfort with telling me whether you have a will or don't have a will does not change the fact that upon your death your estate will have to be administered. You not being willing to tell me what assets you do and don't have or what liabilities you do and don't have. It may not seem like it makes a difference now, but. But it's something that will have to be dealt with in order to close out your estate. You may not feel like telling me if you have anything prepared to take care of yourself in the event of an incapacity, but if you do, and I don't know that that information exists, then I may not be in a position to find it when you are incapacitated and it's all up to me. So I understand your hesitance, but by not providing it, you're putting me at a serious disadvantage when it comes to things that will have to be dealt with whether you are comfortable or not. And that's not an easy conversation to have. And you can see why. If you're trying to do this and get the details over the Thanksgiving table, it may not go well. But if you can at least have the first part of that conversation, then the last part is to set the date just like you did with the first camp, with this camp, when you can have that conversation and to give yourself enough of a buffer with questions prepared in advance, things that they're aware that you're going to ask, documents that you're going to request and have all the pre stuff before the main stuff in order to do the best job you can of mitigating conflict. So I hope that this was helpful if you are still with your family for the loved ones, maybe on Black Friday, maybe you're going to go back for the second round, uh, of meals and family time together this Christmas season. Then this can serve as a primer or just setting the table for some things that you can do to get the most out of these conversations. But I cannot stress enough how important it is for you to know what your family does and does not have when they die or are incapacitated. We spend a significant amount of our planning time at new money, new problems dealing with people who are trying to administer their parents state or who have some anxiety about what would happen to their family or their in laws if somebody slips and falls or if somebody needs advanced assistance. So having this information is crucial. Knowing it in advance puts you in a significantly better position to make sure that when that time arises, that as much as you can, you've prepared for the inevitables. So enjoy this holiday season, don't let it get too stressful for you, and we'll be back next week with another episode for you. See you then.
[00:20:23] Speaker B: From New Money, New Problems. This was the New Money, New Problems podcast, a show for successful professionals searching.
[00:20:30] Speaker A: For the tools they need to navigate.
[00:20:32] Speaker B: Financial opportunities and obstacles they've never seen.
