Finance Talks to Have With Your Family During The Holidays

The end of the year is drawing closer, which means people are getting ready to celebrate the holidays. After a busy year, many families will finally be spending well-deserved quality time together. In addition to having fun, this could be a good time for important conversations, too. As hard as it is to think about, none of us know the last holiday we’ll spend with a loved one. So, now is the time to ask lingering questions and get clarity on things around your family origins, medical history, and finances. Getting answers to questions like whether your grandparents have a Will or if your great aunt has life insurance can save your family a lot of heartache when they pass away.

Here are some conversations to consider having around the dinner table, in-between Sunday night football, or after family banter.

Medical History

When you visit the doctor, especially for the first time, they often ask you whether you have a history of any medical illnesses. Oftentimes, people answer to the best of their knowledge. Imagine being able to provide detailed information to your doctor so that they may provide you with direct and intentional care. If you’re at a loss for information, it may be a good idea to do some digging and find out your family’s medical history as far back as you can. During the holidays, consider asking the seniors in your family about any diseases or conditions their parents, great grandparents, or relatives may have had. For instance, you may learn that Alzheimer’s runs in your family, maybe sickle cell was common, which is relevant if you plan to have kids. This can be helpful information to know any inherent risk and what preventative measures to take.

Healthcare as a senior can be pricey, so planning ahead can also help if you’ll be at risk of any diseases as you age. The average retired couple aged 65 in 2022 may need about $315,000 after-tax dollars saved just to cover health care expenses in retirement according to the Fidelity Retiree Health Care Cost Estimate.

That said, knowing health conditions you may be at risk of can help you potentially increase your chances of healthy aging. Assuming you do, you could end up saving chunks of money on healthcare in your senior years.

Estate Documents

When someone passes, one of the hardest things next to dealing with grief can be trying to figure out whether they have estate documents and where to locate. Knowing your loved ones final wishes for their precious items and assets can make things easier and minimize confusion once they pass. Speak to your parents and grandparents about whether they have estate documents in place. Examples include:

Last will and testament: Outlines who gets your assets when you pass away, final arrangements, and lists guardians for minors or pets. Wills don’t take effect until you die.
Power of attorney: A legally binding document that enables you to appoint someone to make important decisions relating to your finances and health on your behalf should you become incapacitated.

Revocable living trust: Document that says when and how your assets are distributed when you die, but it goes into effect as soon as you sign it and fund the trust with your assets. It’s amenable while you’re alive.

Having the right estate documents in place can help surviving family members avoid probate, which is a process where the courts try to authenticate your will. Ultimately, they can determine what happens to the deceased’s assets if they don’t have a legally binding estate plan. If your loved ones do have estate documents, ask them where they keep the paperwork so it’s easily accessible when the time comes.

Life Insurance

About 52% of Americans have life insurance–both individual and workplace–according to LIMRA, a research, consulting, and professional development nonprofit trade association. Find out whether your loved ones fit into this statistic, especially if they have children. A good next question to ask is who they’ve listed as beneficiaries of their life insurance policy, so you know who to turn to if something happens. If they do have an estate plan in place, it’s possible that these details are listed there.

What if they don’t have life insurance? Gently encourage them to obtain this coverage and list out the benefits. Explain the financial cushion it can provide their loved ones when they pass away, especially if they’ll be leaving behind minor children or have people who are financially dependent on them.

Power of Attorney

We briefly touched on the power of attorney above, but are circling back because it deserves a separate conversation. Ask your loved ones who’s their power of attorney, assuming they have estate documents in place. Even if they don’t, it’s still a good conversation to have so they can start thinking about who they’d like to manage their finances or make decisions regarding their health on their behalf if they become incapacitated. Family feuds over a deceased loved one or even one who can no longer make decisions due to a disability or health condition is a real thing. Leave nothing to assumption – ask who is in charge of these decisions.

We often avoid difficult conversations because they can be uncomfortable or make us face realities we would rather ignore. However, talking about the topics above can be a way to bond as a family and ensure you’re prepared for next steps when a loved one transcends to the other side.

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About Rianka R. Dorsainvil
Rianka R. Dorsainvil, CFP^®️ is the Co-Founder and Co-CEO of 2050 Wealth Partners a virtual, fee-only comprehensive financial planning firm dedicated to serving first-generation wealth-builders, entrepreneurs, and thriving professionals. Rianka also hosts 2050 TrailBlazers, a podcast aimed to address the lack of diversity in the financial planning profession by engaging industry experts and leaders in conversation.

As an award winning successful, millennial Certified Financial Planner professional, Rianka offers a unique perspective not only on the current state of the financial service industry, but on how to stay relevant in an ever-changing world.

Rianka serves as a member of CNBC’s Digital Financial Advisor Council and CFP Board’s Diversity Advisory Group, is a Forbes Personal Finance Contributor, and has been recognized for her accomplishments and leadership within the industry by leading publications and organizations such as Investment News’ inaugural 2017 Women to Watch Rising Star and Wealth Management’s Ten to Watch in 2018. She has been published in PBS NewsHour, Forbes, USA Today, Black Enterprise, CNBC, Women’s Health, and more.