When Should Children and Retiring Parents Have 'the Talk'?

Among the complexities of later life are added health-care costs and challenges, planning for living arrangements should long-term illness require it and being assured that your legacy and estate is passed on properly to your heirs. For those who should be relaxing and enjoying their retirement years, stress is often caused because retirees have neglected to not only lay out a plan for their later years that consists of estate issues, living and health arrangements, but they've failed to discuss their intentions with their family.

Estate planning, living wills and health-care proxies are all topics that retirees are being told they need to address.

To address them properly requires a discussion between retirees and their families. I call it " the Talk" between adult children and their parents about these later-life issues. All families seem to have it at some point, but the reality is that most times, it's done too late.It seems that everyone has a story about having "The Talk" too late. The family who wanted to correct a parent's estate plan but recognized that "look back" provisions on a trust negated any plans to salvage a rapidly depleting estate. The brother or sister who had expectations of what they would inherit and were significantly disappointed when their dying father revealed his actual plans for those assets. Family wealth and sadly, even relationships between families, suffer because these discussions are done "too late."

So when should you have " the Talk "?

I've long been a proponent of having the talk when parents are nearing the point of retirement and they've spent significant time and effort designing what their plans will be. It is often a time of introspection and clear thinking, and this makes it an appropriate time to have that all important family discussion.Fidelity conducted an " Intra-Family Generational Finance Study ," which agrees with me that this is the right time to have this discussion. "Parents are more likely to cite when they near or enter retirement as the right time."Yet, it was a recent discussion with America's leading financial adviser, Ric Edelman , that has led me to recognize that the timing of The Talk should probably happen well before that."Parents need to discuss money with their kids starting as early as age three," Edelman says. "After all, the child is already helping to make financial decisions at that time, such as which cereal to buy."Edelman advocates that young children should be made aware of money and how it's earned and used at an early age. He even believes that as children grow up, it's beneficial to include them in the process of putting together your tax return. He feels that this will help them to recognize the impact of money and the need to plan around it."You ask six-year-olds where does money come from, and they'll tell you the ATM," Edelman points out. "Talking to your children early prepares them for college planning and for their own retirement planning as well."It's hard to argue with the man who has been named Barron's Top Independent Financial Adviser in the nation three times, and Edelman makes the point clearly that educating children at an early age and opening up the channels of communication between families about money will set the stage for proper planning throughout the generations.No matter what age you feel is best, it's clear that having "The Talk" earlier rather than later is the best solution.