A new study from Fidelity Investments confirms what we have always known: there is a huge disconnect between what adult kids believe and what their parents believe. Adult children and their parents recognize the need to talk about inheritance, long-term care and retirement planning issues, but nearly 50% of adult children do not feel like they’ve had sufficient conversations with their parents about these issues.
A couple of points made in the study:
Nearly all of the parents said they will not need financial help from their kids while a quarter of the kids said they believe they will have to help their parents in retirement. Another misconception: the adult children underestimated the value of their parents’ estates by more than $100,000 on average.
“There are implications of not having those conversations. Both parents and their adult children make assumptions, and they’re not going to be based in reality, and they won’t be the best decisions for their family.”
If you have an estate plan in effect, then by all means sit down with your adult kids and discuss it. There is nothing worse for children going through the grieving process than to be faced with surprises. If everyone is clear on what you want and what you expect, the chances of problems cropping up are reduced dramatically. If you don’t have a comprehensive estate plan, then you need one.
The barriers to talking: 40% of adult children said the top barrier is that they feel like it’s none of their business to ask their parents about this stuff. But only 15% of parents said that money issues are private. So kids, start asking questions.
The result: peace of mind. Having detailed conversations appears to have a positive effect on both parents and adult children alike. Peace of mind of parents jumped from 61% to 91% when comparing parents who have not had detailed conversations with those who have. The full Fidelity report is HERE.