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Holiday Conversations To Have Before Grandma Gets Run Over By a Reindeer Thumbnail

Holiday Conversations To Have Before Grandma Gets Run Over By a Reindeer

‘Tis the season to deck the halls, light the menorah and provide peace on earth (or at least to your family) with a well-constructed financial and estate plan.

Getting your financial situation in place for your family is one of the greatest gifts you can give them.


With families getting together for the holidays, this is a good time to encourage conversations about financial matters that might otherwise go unsaid. While it may feel uncomfortable talking about financial and medical plans, it can help spare unnecessary pain, chaos and costly mistakes in the emotional event of death or disability.

Why It’s Important to Talk About Money

We have all seen the headlines of celebrities passing away without an estate plan, from the costs and publicity of probate to disinheriting children or unintentionally leaving assets to an ex-spouse due to out-of-date beneficiary forms. These common blunders are hardly limited to the rich and famous. And how about lottery winners who end up in financial ruins? Unfortunately, many heirs treat an inheritance as a windfall with about 70% blowing the inheritance in one generation, and 90% of family wealth gone before reaching the third generation. There are numerous instances where hard-earned retirement savings have wound up in the wrong hands or become subject to unnecessary taxes simply because the taxpayer failed to designate an IRA beneficiary or improperly designated his estate or a trust as beneficiary. Even those with the best intentions may not understand the critical tax impact of their actions where so much as retitling an account can make an entire life savings instantly taxable income. “You don’t want this to be the thing that tears your family apart,” America’s IRA Expert, Ed Slott, CPA, says. “If your children don’t know your plans or wishes and disagree about how to handle matters, loads of time could be spent fighting in court while all your hard-earned money ends up in the pockets of lawyers—instead of those you love.”

Who to Involve

First, reflect upon your own thoughts and preferences and connect with your spouse if you are married. From there, involve the appropriate professionals (advisors, accountants and attorneys) and key players from your family, including any heirs or appointed individuals, such as financial and medical powers of attorneys, guardians and executors/trustees. Once your own oxygen mask is applied, as they say, consider helping loved ones whose health and financial wellbeing may ultimately rely upon or impact you as well. This may be aging parents, siblings or other individuals who would benefit from these important reminders and updates. If any of these parties are reluctant to share, remind them it is because you care to honor their wishes or create family harmony during a difficult time that you want to discuss these things. At a minimum, aim to identify professional contacts who can answer these questions when the time comes if they prefer to keep these matters private.

The Basics to Include

Use the worksheets on the following pages to organize your thoughts and discussions with key participants in your financial and medical plans.

11 - November_HolidayConversations_WP_All_2022.pdf

By Ed Slott and Company, LLC

Investment advisory services offered through Mutual Advisors, LLC DBA California Retirement Advisors, a SEC registered investment adviser. Securities offered through Mutual Securities, Inc., member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. CA Insurance license #0B09076. © 2022 Ed Slott and Company, LLC. Reprinted with permission. Ed Slott and Company LLC takes no responsibility for the current accuracy of this article. This content is developed from sources believed to be providing accurate information and provided by California Retirement Advisors. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. California Retirement Advisors, nor any of its members, are tax accountants or legal attorneys and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.