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.

1. How recently have your investments been reviewed to ensure the current portfolio reflects your retirement needs and risk tolerance?
2. Have you prepared financial projections to ensure that you will/continue to have sufficient cash flow during retirement to support your lifestyle?
3. Does your retirement plan contemplate various contingencies which could impact your lifestyle (e.g., additional health care, etc.)?
4. 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)?
5. Do your wills reflect your current wishes for executors, legacies, and treatment of major assets on your death?
6. 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?
7. Do you have Powers of Attorney for property and personal care and do they reflect your current wishes?
8. Who are the key members of your financial advisory team (i.e., accountant, lawyer, investment advisor, etc.)?
9. Where are important documents stored and are there clear instructions to make it as easy as possible to manage your estate?
10. 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.