A four-step guide to getting your financial (stuff) together
Our company’s founder, Randy Olson has a famous story about parents and finances. Randy grew up on a farm outside Ardrossan, Alberta. 25 years into Randy’s financial services career – long after he had founded Capital – his mom had a bunch of financial questions they were wrestling with on the farm. Like many of us, she turned to her close advisory network for help – which, naturally enough, included the local hairdresser.
The hairdresser listened to his mom’s story, pulled a card from the mirror and handed it to her: “This guy really knows his stuff. Maybe you should talk to him.”
It was Randy’s card. Her son. The hairdresser didn’t even know they were related.
She went home to her husband and said, “Gordon, Randy’s not a kid anymore. We should talk to him about this.”
The beginning of this story is unique and not everyone will experience it this way, therefore, kids, you might have to start the conversation.
Being in business for over 40 years lends a unique perspective on how financial planning is done – a multi-generational one. Frequently, we’ve started off working with one generation, then their kids, then their grandkids.
One thing that’s hit home with these discussions is how little families talk about finances.
A lot of the time, the onus is put on parents to start the conversation. But for any of us who are adults with aging parents, it can be even more important to us to ask some questions – because we’re going to be the ones looking after things when they’re gone, and doubly so if they’re hit with memory loss or Alzheimer’s.
Every journey starts with a couple of early steps. Here's our four-step guide to get things started:
1. Send them this worksheet: Where is Everything.
Basically, this gets everything in one place: where their bank accounts are, who their insurance is with, who their lawyer is, even their social media passwords. Because it can be very hard to find that information after the fact.
I sent this form to a friend recently for her mom. It was a really soft way to start the conversation: “Mom, my friend gave me this worksheet for you to fill out.”
My friend is a lawyer and a planner by nature. She was a bit shocked by some of the answers that came back. But it opened the door to a lot of conversations.
2. Confirm if they have a will.
Dying without a will – known as dying “intestate”, can cause some serious issues.
Mike Simons, partner at the law firm McCuaig Desrochers LLP and a Past Chair of the Wills, Estates and Trusts section of the Canadian Bar Association knows the perils of dealing with an intestate estate:
"It can range from bad to worse – from a funeral home not knowing who should be listed on the death certificate to a bank not being able to release information or pay bills. At best it causes delays in dealing with the estate. At worst it can cause unplanned and unintended consequences that will trigger court applications and significantly higher costs for all involved. I think that the cliche “an ounce of prevention is worth a pound of cure” is very applicable to estate planning."
3. Ask where they keep their will or who it’s filed with.
In a perfect world, families would have deep planning conversations while everyone is sound of mind and healthy, but it often (usually) doesn’t end up that way. Some parents might feel private about the contents of that will. It might put them on their guard. If your folks give you a look like you’re a circling buzzard waiting for their untimely demise, it may not be effective to ask about what it says inside the will.
4. But, it should be on side to ask one question: “Who is your executor?”
Because you might be surprised to find out that their executor is … you. If that’s the case, you may want to have an idea of what that means.
In the case of my friend the lawyer, the conversation with her mom went like this:
Daughter: So mom, do you have dad down as your executor?
Mom: Oh, I wouldn’t want to put all that work on him …
Daughter: So then, who is … ohhhh.
If you want a start on what being an executor means, here’s a guide to being a Personal Representative (the new term for Executor) from the Centre for Public Legal Education in Alberta
These discussions can be tough ones, but the conversations can end up with a much better flow of communication. Going through exercises like this can open up some planning opportunities too. Maybe your folks have never really organized their finances – they might have little bits of savings or insurance all over the place. Or they might have nothing.
They – and you – might also have some surprises that they haven’t thought about. They might have a big tax bill waiting for them – and sometimes that’s something that just a bit of planning could address. At the very least, you’ll have given them a chance to think about the future – and maybe to let you in on their plans.
If you and your family need help with your financial journey, you don’t have to rely on your local hairdresser (as smart as they may be). We’ve helped many families navigate their financial journeys and we’d be happy to talk to you about yours – connect with us to get started.