Family Dynamics
Family Dynamics
Here are a few topics we will cover:
- When to loop in the professionals - typically the sooner, the better
- The important documents
- What you can do to minimize any surprises
- Cleaning up beneficiaries
- Settling estates
Thanks for tuning in. Questions about today's episode let us know.
Our Podcast – Your Investment Partners
Sit down with Paul and Garrett of Ascend Investment Partners for a bi-weekly conversation about all things financial. Focusing on helping you plan, keep, and grow for a bright future.
Transcript:
00;00;06;29 - 00;00;23;18
Garrett & Paul
Hello and welcome to your investment partners with Paul and Garrett, where we talk about all things financial, focusing on helping you plan, keep and grow for a successful future. If you're new to the podcast, welcome. And if you're tuning in again, welcome back and thank you for listening. Hello and welcome to your investment partners with Paul and Garrett.
00;00;23;25 - 00;00;42;10
Garrett & Paul
Today we're talking about family dynamics. When you're transitioning from one generation to the next, there's often some hard conversations that need to take place. When do you bring a child in and what should they know? Or if you're a child helping out mom and dad, what should you know? And what can you do to help? If you have questions about any of the items discussed today, please reach out either by phone or email.
00;00;42;14 - 00;01;07;28
Garrett & Paul
My name is Garrett Smith and we look forward to having you with us today. Well, here we go again. Hello there. Today, we're going to talk about kind of family dynamics, aging parent, whether you are the aging parent or you're the child of an aging parent. Kind of some things we've seen along the way that seem to make that transition maybe a little smoother for a child because it's it's hard.
00;01;08;02 - 00;01;36;11
Garrett & Paul
I, I don't know any family that doesn't struggle to one degree or another to do this. There's no magic bullet, unfortunately. Well, yeah. So the first question is, at what point do I, you know, kind of let my kids in the know on what's going on? You know, do you want it? Do you want your kids to know everything that you've got and you know, it's just it's different for every family.
00;01;36;29 - 00;02;04;19
Garrett & Paul
Some some families have kids that maybe feel a little entitled. Mom and dad's a little more reluctant to give up that information. You know, family businesses, that's a whole nother challenge. And so, you know, there's no right or wrong time for all this because it's just different for every family. Yeah. And I think there's no good or bad time to do it.
00;02;04;29 - 00;02;23;17
Garrett & Paul
You know, I think there's a you know, I think there's advantages to delaying it as long as possible, because then you can if you're the parent, you don't have to say no as often. You know, once there's when some kids know, there's you know, over time, there's just asks is what kids do with parents. I think that's yeah.
00;02;23;17 - 00;02;44;15
Garrett & Paul
You know human nature and and so delaying that kind of delays those questions but the earlier on that you start to approach this the more balanced and the easier of a transition it can be particularly if there's a business or a significant estate that needs to needs to be transitioned from one generation to another. Mm hmm. So they've you know, they've all got their pros and cons.
00;02;44;15 - 00;03;04;23
Garrett & Paul
And I think the best way that we've seen it work, though, is, you know, mom, Mom brought the kids in probably she was I'm guessing she was probably 80 ish and had a had a meet and greet with the kids. She brought them in the loop on when they had some here in the office. In the office. Meet us.
00;03;04;25 - 00;03;33;19
Garrett & Paul
Brought them in the office to meet us. You know, the kids are 55 to 60 years old. And so we met them pretty early on. Mom lived another, what, almost 20 years. And so, you know, we'd been meeting every three or four years with the kids, knew the kids. They knew us. Mom went in a nursing home. We worked the work with the kids to kind of work through all that income needs.
00;03;33;19 - 00;03;52;07
Garrett & Paul
And, you know, we started looking really closely at the tax situation and there were some problems and made some adjustments in anyway. It was just kind of a process. And it it worked. It worked really, really well because we we knew who we were supposed to be working with and we could make some make some adjustments along the way.
00;03;52;14 - 00;04;09;28
Garrett & Paul
Yeah. I think the sooner you can loop in the professionals, in the parent's life, in your life, you know, whoever it is with your kids, the better. Yeah. You know, I remember even as a young kid, my grandpa would do this. He would take us around. He said, This is my attorney, this is my finance guy, this is my bank.
00;04;09;28 - 00;04;23;27
Garrett & Paul
And he would introduce, you know, when I was ten and he was trying to teach me other lessons, too. But it was also when it came down and we were going through the estate, you know, I was like, hey, my dad was the one who's kind of settling in. And I said, Dad, well, you know, it's this guy over here, you remember?
00;04;24;04 - 00;04;42;05
Garrett & Paul
And so, you know, they we I didn't know any information about it. I didn't know. Right. You know, anything that was going on. But I knew who they were. Right. And I you know, I think you can be so closed off that you don't even know where to start. Right. And that's I think that's the worst situation. That is the worst situation.
00;04;42;06 - 00;05;05;11
Garrett & Paul
Just being totally surprised. Kids have to just start going through the mail to find out what's going on. Yeah. Yeah. And I think it it also opens up. You can have that you know, we have that conversation, too, of, Hey, I want you to meet my kids. There's, you know, he child one and two or great. CHILD three is having a little bit of struggles, but I would like to not discuss any financial situation.
00;05;06;06 - 00;05;29;06
Garrett & Paul
You know, I just kind of want to have the introduction and then, you know, and then once we kind of have the expectations, it's really easy for us. And they're on our radar. We're on their radar. And, you know, we can kind of help work through that family dynamic of of, you know, having that introduction already made. And people are really good to take some of our cards and say, I'm going to take a couple of your cards and give them to my kids so they know, you know, so they know who to call.
00;05;29;06 - 00;05;50;16
Garrett & Paul
And and so and that's and that's good. But beyond us, you know, the kids need to know, you know, who does your taxes, Who's your attorney? Do you have an attorney? You know, do you have a trust? Do you have a well, who's your attorney? Who's your doctor? You know, those kind of things. I think it's important for the for the kids at some point.
00;05;51;00 - 00;06;14;07
Garrett & Paul
Question is when. But at some point, the kids need to kind of know who the professionals are in your life for sure. Yeah. And if you're a big, you know, do it yourselfer, you know, at least knowing, I think that kind of leads into, you know, where at least are the documents, you know, where are the policies, What's where's the trust documents, where's the will, where's, you know, just ultimately, it's the documents, the signed document that will drive everything once mom and dad are gone.
00;06;14;08 - 00;06;35;13
Garrett & Paul
Right. And you've got to know where they are or it just goes nowhere. Right. And so I think that's kind of the second thing that we've seen that works better is if you at least know where the documents are, where's the book? You know, everybody has the book that has everything in it. You know, the attorneys are a box or the filing cabinet.
00;06;35;18 - 00;06;56;11
Garrett & Paul
Yeah. You know, the attorneys, they keep all the documents in their office. But if you don't know who the attorney is at, Yeah, you don't know who to call. So there's always a copy somewhere. And and you don't have to show it to them. Just. Just let them know. This is the book. This is the filing cabinet. This is the shoe box where the stuff is.
00;06;57;01 - 00;07;25;05
Garrett & Paul
Yeah. And if you're, you know, and then you're filling that because, you know, oftentimes if you have, say, an insurance policy, you might get notified about that, not that once a year. And so, yeah you know, if that notice comes in June and mom or dad passes away in January and the kids don't even know to look for it because it wasn't, you know, And so it's kind of feeling that to have a few years worth of statements alongside the, you know, policies or the, you know, legal documents goes goes a long way because then they know to keep an eye out for it.
00;07;25;05 - 00;07;47;13
Garrett & Paul
You know, I can't I there's been a number of times more than I can remember that there's been hey, we just got this letter. We have no idea. Right. What do we do about that state we just talked about? There was, I think, two insurance policies that, you know, nobody knew about. There was a third one that we knew about and we were working on, but there was two others that were just out of the blue.
00;07;47;20 - 00;08;08;07
Garrett & Paul
And they can you know, they can mess up, for lack of a better word, you know, careful planning. Yeah. You know. Any surprises, surprises in estate planning or finances is just it's just not a good thing. And so to minimize surprises is is that's probably the overall message is just what can we do to minimize any surprises. Yeah.
00;08;08;15 - 00;08;27;05
Garrett & Paul
So who the professionals are and where the where the where's the box, where's the book? And then in that book, make sure you have at least one statement from everything you have. Well, even if it's an old one, you know, and I think one thing too is going in there and maybe trimming out an old account that's closed.
00;08;27;05 - 00;08;45;12
Garrett & Paul
Right. I don't know how many times we've tried to track down, you know, I knew I had this account. I haven't got a statement from them for ten years yet. I, I don't know what happened to it. Yeah. So you know what? Anyway, you can chase your tail for a long time on things like that. So if you no longer have it making a note of that.
00;08;45;15 - 00;09;19;11
Garrett & Paul
Right. And that's why we're you know, that's obviously one thing that we like to do as, as mom and dad get up in, in years is just trying to simplify the picture so there's less, you know, kind of less loose ends out there. Right. You know, whether it be maybe consolidate an account or clearing up an insurance policy or letting an insurance policy lapse, it's no longer needed and to reduce expenses, but then also to kind of clean up from the estate side or, you know, anything like that of of, you know, what simplification can you make ahead of time without kind of compromising, you know, the the goals?
00;09;19;11 - 00;09;53;24
Garrett & Paul
You shouldn't just give up an insurance policy just because, you know, if it could be a good way to just kind of simplify the overall estate there. Yeah. Yep. Sure. So I think I think kind of the other point that we've seen is, is particularly more for those who are taking care of mom or dad, kind of what you know, what they need to be doing is whether it's a successor trustee or a medical power of attorney or whoever those people are, they're usually kids, not not all the time that they're designated to kind of help make some decisions if if, you know, mom and dad can't make those anymore.
00;09;53;27 - 00;10;21;28
Garrett & Paul
Mm. Yeah. And those are those are all really important. And when you, when you do set up a trust, you know, you have to be kind of thoughtful about who should that person be. I know in my mom and dad's, we just kind of redid some of their trust work and stuff. And, you know, some of us siblings, me especially, are a little bit more financially minded, but there's other siblings that are more medically minded.
00;10;21;28 - 00;10;49;07
Garrett & Paul
So, you know, you can have different people making decisions for different things. Medical power of attorney. So if you get in a situation where you can't, you know, decide for yourself or you're not quite sure what to do, it's good to have, you know, somebody that that understands you and what you want to have happen. And and, you know, all the life saving stuff that you may or may not want and and they're more medically minded.
00;10;49;29 - 00;11;23;14
Garrett & Paul
They need to be your medical power of attorney so that they can help you make those kind of decisions. Financial people, kind of a different mindset. People are they're more math oriented, you know, great for for that type of a situation. So you just have to, you know, kind of figure out. But everybody kind of needs to know, you know, their position and what their authority is so that there's cause whenever, you know, you settle in a state, there's there's just inherently there's just going to be some conflicts.
00;11;23;14 - 00;11;44;01
Garrett & Paul
And it's not because the kids don't love each other or anything like that. It you know, a lot of times it's just we have we have differences of opinion. No, I don't think you should do that. Well, remember, I'm the decision maker for this particular item, so this is how I see it. You know, I'll work with you on it, but, you know, somebody's got to decide.
00;11;44;15 - 00;12;11;01
Garrett & Paul
Yeah. And I think it's when you I think that's probably the most common that we've seen is usually one kid's over medical decisions and another one's over financial decisions. And that's a pretty common breakdown. And and for the child that's over the medical decisions, it's they're usually pretty obvious. You know you can't blend your your health lives together between the parent and child but you can blend your finances together if you're over the finances.
00;12;11;10 - 00;12;39;17
Garrett & Paul
And that can cause really big problems. Right. So if you if you're the unlucky one that gets put over the finances, don't co-mingle. Yes. Yeah. Do everything you can to keep them separated. It's really easy to say I'm doing this and it's helping mom, but there's a secondary benefit of helping myself. Just don't. Yeah. Just do everything you can to keep everything separated and clean.
00;12;39;26 - 00;13;07;12
Garrett & Paul
And. And, you know, if you're worried about something, then, you know, just be upfront with with those kind of decisions. You know, I think, you know, 99% of the people are well intentioned, but it's easy to be well-intentioned and kind of just blend some things together that don't need to be. So if if you're over if you're over the money, you know, keep it as separate as possible, just don't mix them together.
00;13;07;12 - 00;13;35;24
Garrett & Paul
Yeah, for sure. I think is is you know, as you go through all of those kind of some cleanup items, you want to you want to be doing that that's really important is cleaning up any beneficiary designations. I think this is kind of on that tying up loose ends because those beneficiaries usually change over time. If you have, you know, a lot of times they get set up and then, you know, 15 years go by and you haven't reviewed them, you know, particularly in a trust or even at beneficiaries on an IRA.
00;13;35;24 - 00;13;59;04
Garrett & Paul
And and just making sure those are who you think they are and in the ways that they should be, because, you know, dynamics change. Kids get married, they get divorced, they have their own kids. And that may change how you want to distribute an estate, particularly if you've got significant assets working through kind of all the variabilities of saying, you know, are they going to the places that I want them to go?
00;13;59;28 - 00;14;22;07
Garrett & Paul
Because because just as is the mom and dad's life is changing. So as the kids lives, you know, we've worked really, really hard on checking beneficiaries on our annual reviews for, I don't know, you know, 15, 20 years. We've just been working on it. And it seems like every year as we're doing reviews, we find one or two.
00;14;22;07 - 00;14;46;14
Garrett & Paul
That's that's not right. And I don't know how it slips through the crack. I just but it is really important to make sure that those those beneficiaries are lined up. In fact, we just had I just had a friend. She's not a client, but I just had a friend that her mom just recently passed away and had a, you know, a reasonably large IRA.
00;14;46;15 - 00;15;09;17
Garrett & Paul
And there was three sisters. And she she named two of the sisters as beneficiaries and told them to share with the third sister. So the two who were the executors of the estate were the beneficiaries. And they were supposed to share it with the third sister. Well, in an IRA, that's a problem because, you know, only one name could be on the account.
00;15;10;04 - 00;15;27;19
Garrett & Paul
Yeah, well, when you're a beneficiary, you have to pull the money out if you're going to pay off the sister who's not a beneficiary, you have to pull money out, get taxed on it, and then share what's left over. And so if it forced a distribution from the IRA, when that may or may not have been the best thing to do.
00;15;27;19 - 00;15;49;05
Garrett & Paul
So it's just really important to make sure that those, you know, beneficiary designations are correct, for sure. Yeah. And I think, you know, they they change for for a number of reasons. You know, maybe a child has gotten sick and you've got to make some contingencies, you know, and you think you're doing it with the right intent. You know, you just take care of your third sister.
00;15;49;05 - 00;16;09;20
Garrett & Paul
She needs extra help. You know, not necessarily about this specific situation, but that does happen. And so we're working through what are the tax implications of this decision needs to be considered. What's the estate planning? You know, implications of doing it this way, because usually you can get to the result that you want. It just may not be as straightforward.
00;16;09;20 - 00;16;27;21
Garrett & Paul
I think all of us that have ever gone through tax season or estate planning know that it it can eventually get there, but it's usually not as straightforward as you as you might think. Yeah, settling estate is a is a is a big headache. There's no there's just no way around it. Anybody with any assets at all. It's, it's, it's a pain.
00;16;27;21 - 00;17;03;22
Garrett & Paul
It just is. Yeah. I think that's, those are kind of the major ones that were on my mind. Anything else you want to touch on now? We had a checklist here and there's about 50 items on it for this particular subject. So if you're if again, as usual, if you're if this is a topic that's on your mind and you need a little more information or, you know, even call us and just ask us for the checklist, we can send it out to you and you can kind of go through it and and make sure that either yourself or your parent is kind of thought through all the, you know, kind of the bullet points
00;17;03;22 - 00;17;22;03
Garrett & Paul
that they need to worry about on this particular subject. Yeah, I'm a big fan of checklists, you know, whether even if 90% of it doesn't apply to it, that 10% can, you know, a lot of times maybe save you a lot of headaches, a lot of taxes, a lot of problems down the road. But just making sure you got kind of everything, everything lined up goes a long ways.
00;17;22;03 - 00;17;40;06
Garrett & Paul
So, as always, share this podcast with others who may need it. And if you've got particular questions about your situation, give us a call. Thanks for listening. Thank you for tuning in and listening to your investment partners with Paul and Garrett. If you like what you heard, be sure to subscribe to our podcast on iTunes, Spotify or wherever you get your podcasts.
00;17;40;17 - 00;18;02;01
Garrett & Paul
Also, visit us as an investment dot com where you can subscribe to our newsletter to keep you up to date. See you in the next episode. Kessler Norman and Ride LLC. DBA Ascend Investment Partners is a registered investment advisor. Advisory services are only offered to clients or prospective clients where our firm and its representatives are properly licensed or exempt from licensure.
00;18;02;11 - 00;18;28;29
Garrett & Paul
No advice may be rendered by ASCEND Investment partners unless the client service agreement is in place. The opinions expressed in this podcast are for general informational purposes only and are not intended to provide specific advice, performance data, or recommendations that any particular security portfolio of securities, transaction or investment strategy is suitable for any specific person. This program is only intended to provide education about the financial industry.
00;18;29;08 - 00;18;50;16
Garrett & Paul
All opinions contained in this podcast are subject to change at any time without notice to determine which, if any, investments may be appropriate for you, please consult with your financial advisor prior to investing. Any past performance discussed during this podcast is not guaranteed of future results. As always, please remember that all investing involves risk and possible loss.
The commentary on this website reflects the personal opinions, viewpoints and analyses of the Ascend Investment Partners employees providing such comments, and should not be regarded as a description of advisory services provided by Kesler, Norman & Wride, LLC dba Ascend Investment Partners or performance returns of any Ascend Investment Partners Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Ascend Investment Partners manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Ascend Investment Partners provides links for your convenience to websites produced by other providers or industry related material. Accessing websites through links directs you away from our website. Ascend Investment Partners is not responsible for errors or omissions in the material on third party websites, and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.
To Get Started Click Here
(https://ascendinvestment.com/start)
Sign Up for Email to stay in touch
(https://ascendinvestment.com/signup)