The Conversation Startlers –5 Ways to Startle The Parents into a Estate Planning Conversation.

My father was horrible with money.

Mine and his.

Grandfather (on my mother’s side), worked six days a week stocking shelves in a downtown New York City grocery store. Thirty years – Twelve hours a day.

When he died in 1969, Joe (Giuseppe) Zappello, a frail man who lived above an ethnic grocery, saved $10,000 – a life’s effort, which he instructed be used for my college education.

Dad spent my inheritance on a new 1969 blue Mercury Cougar with white leather interior. Admittedly, it was a beauty. I still remember that car like it was yesterday.

In pristine condition, the classic commands about $30,000, which looking back, may have been a better “investment” than my college education.

cougar interior

Dad saved once in his life. Just in time for my manager at a penny stock firm to put the entire ef­fort in jeopardy by liquidating all his quality stock positions (without my knowledge) and purchasing worthless securities for a hefty commission. Great.

Dad was part of the working poor and deprived of even the littlest of luxuries as a kid; my grandfather was emotionally freezing cold and my grandmother was the entrepreneur and breadwinner for the most part (very odd in the good old days), so except for his maternal grandmother, dad didn’t receive much attention to compensate for the lack of material goods.

Even when I tried to approach the subject of money with him in 1991 he dismissed my questions as if I was the village idiot even though strangely enough, he allowed me to invest for him.

You never questioned elders about financial matters in my family or dug into the reasoning behind money decisions.

Discussing finances with family, especially parents is difficult and awkward. Conversation starters are tough. It’s important to have them however, as bad decisions or no decisions by parents, will leave you, the kids, the family, in a dilemma later.

Here are five “fire” conversation starters that will help. They’re controversial.  I’ve used them successfully.

1). When you die can I please have that diamond necklace grandma left you?

Replace “diamond necklace” with any heirloom you want. Deliver the line and shut up.
I would soften the impact with a couple of glasses of shared wine beforehand. Coming
across as a selfish ass on purpose is tough. The goal is to jolt your parents to a response which can lead to a discussion about proper will and legacy planning.

2). What do you think I should do if I told you I had a month to live?

Here, you’re asking the parents for guidance. What a way to make the parents go mushy inside.  Lower the defenses.

“Not my baby!”

not my baby

If they start going on about how you should have a bucket list – blah, blah, blah, make sure to steer the conversation back to them. Segue to asking the parents how they’ve prepared. It’s a long way around the subject but ultimately you’ll get where you need to be. I’m sorry.

3). What do you wish you would have said to or asked granddad (grandma) before they died?

Gee, I wish they would have told me where all their important documents were kept so
I didn’t need to ransack the house at the worst time? I deal with clients who
lost parents a decade ago and abandoned investment and banking dollars are still surfacing.

4). Do you realize if you die tomorrow I have no idea whether you want to be cremated or buried?

We’re planning a coin toss but you won’t care because you’re dead. Even parents who laments “Oh don’t fret over me, I don’t care what you do, I’ll be dead,” are full of it.

They do care!

It’s their responsibility to provide instructions for others to follow. This should NOT be your decision.

5). How do you think Snowy would feel if she was whisked off to an animal shelter if you died?

I don’t mean to throw the pet in the line of fire however it’s an effective ice breaker. We
love our pets and can’t imagine the horror of poor Puffy carted away after we die. I’m a passionate animal person.

I’ve experienced, more often than I prefer, owners not communicating intentions for pets. Like those left behind are supposed to assume. Placing Trixie strategically into an estate conversation can break down walls, allow information to flow.

Communicate with your children & loved ones about money. Share your successes and failures. They shouldn’t feel threatened to ask about your financial situation.

If grown kids inquire about your estate planning answer them. Help them understand your intentions.

Don’t make loved ones feel questions about money are “off limits,” or “unacceptable.”

Cater these “startlers” to your situation. Parents will remember your frankness, your sense of humor.

Occasionally, shock and awe works.

Next: How to use a third party to facilitate the conversation.

What a Princess Taught Me About Money. And she Ain’t No Dog, Neither.

I hold a great affinity for animals, especially dogs and specifically my Princess. There’s a primal beauty to them-and us. Our instinct keeps us alive; it’s imbedded in our internal code to protect. We are hard-wired to survive at all costs. Unfortunately, the skill set required to protect ourselves from predators is not exactly proper to employ when making investment or overall financial decisions.

I’m not exactly sure her name fits her either since Princess is far from graceful but I can tell she knows it and she’s certain I’m going to love her anyway – As I watch her behaviors I see many similarities and differences we can learn from  when it comes to managing finances. Here are a few lessons I’ve learned.

1). Occasionally we believe ourselves to be something we’re not – It’s human nature to be overconfident in our personal investing abilities. Numerous academic studies prove that over 80% of investors who deem themselves to be “successful,” or have achieved better results than the overall stock market actually experienced extremely poor overall returns. When examined closely, taking into account several variables including taxes and commissions, the majority of investors turned out to suffer from below-average return rates. It’s best to be yourself and understand how markets are humbling mechanisms. Create rules and disciplines that make sense to you and stick with them.

2). Sometimes we lose control – When Princess gets excited she has a tough time controlling her bladder. When we get excited we have a tough time making a decision and that will usually lead to a mistake. Those who make investment or financial decisions in the heat of fear or euphoria will most likely wind up in worse shape longer term.

For example, those who sold off all their stock positions in March 2009 or purchased tech stocks in the heat of the moment back in 1999, fared worst than most. Unlike Princess who can’t control her excitement, you need to step back, consult with an objective third party and create a strategy first before taking dramatic financial actions. Those individuals who make large purchases impulsively, especially on credit cards are paying dearly for their impetuous nature as the average credit card interest rate currently hovers around 15%.

3). Biting off more than you can chew is a bad, bad thing – Princess loves her toys; she also finds a way to destroy them in record time and her “daddy” keeps purchasing her new ones. Not a good financial decision overall on my part but she appears conditioned to continue since there’s always a new toy on the way.

Over the last 20 years, many bit off more debt than their households can service because of the assumption that asset prices, especially house prices would continue to increase. Households, saddled with historically large debt loads, stagnant asset prices and little increase in wages are now working slowly through household balance sheet repair. This is a long, arduous process which will take many years. It’s best now to watch spending, aggressively pay down debts and not take on any excessive debt going forward.

Princess may certainly get a new toy very soon; we don’t appear to be receiving any relief from the fiscal side (Washington & congress) or rising house prices anytime soon (at least the heated prices you remember), so it’s up to us to take responsibility now and get through an anemic economic cycle on our own.

4). When you’re done, you’re done – There are some dogs and people Princess simply does not care for and I can sense when her triggers have been hit. Recent studies show that as a generous people, we will continue to give money to family members and friends with established track records of spotty financial behavior. To preserve your own situation, it may be best to draw the line and say no.

There’s nothing wrong with encouraging others to seek different avenues for loans and gifts, especially if your current household debt levels are unsustainably high. It doesn’t make you a bad person. It doesn’t make Princess a bad dog either if she feels she doesn’t “like” certain people or dogs.

Some dogs are more fashionable than you are.

Princess knows what her boundaries are.

Do you?