<p>alh, I was thinking more in the sense of having a child assume “well, it’s OK if I don’t get a job/save/set up retirement accounts/etc etc because my parents have enough money to support me”. Financial safety net for things like sudden job loss, medical emergency, what have you–yeah, we’re there. </p>
<p>If we absolutely had to (heaven forbid) support them because things went disasterously wrong, we could manage that. But that’s different than cutting them regular allowance checks when they’re in the 20’s and 30’s so they can afford a nicer apartment, drinks out with friends, and other frills. </p>
<p>Who is the executor of your estate if something were to happen to you and your spouse?</p>
<p>We have gotten to the point where our oldest son (in his mid -20s) is the smartest, most responsible, most rationale, most logical, most knowledgeable of all the available choices.</p>
<p>We intend on removing our current executor (one of our parents, who is now almost 80) and giving the “honor” to our oldest son.</p>
<p>He will then be brought up to date on all our assets and will be the third person to really know the whole picture.</p>
<p>I have thought about that. In the past, my mother was the beneficiary on all of my life insurance policies because I knew she would do right by my kids. When she passed away, I made it my brother. I just switched them over directly to the kids now that they are both over 18. My son will be the executor. He’s the level headed frugal one. </p>
<p>“Who is the executor of your estate if something were to happen to you and your spouse?”</p>
<p>That’s an interesting question. Right now, it’s a close family friend who is an accountant by training and has some kind of financial planner cert, though we don’t use him for financial planning. It is someone we trust implicitly. But that decision was made when our kids were little and needed a guardian and we knew he’d administer everything appropriately on behalf of the guardian (my sister). Now that they are 21, maybe that should change? But why?</p>
<p>Some people think that a non-heir who is trusted by all of the possible heirs may be a better choice as an executor if there is any possibility of arguments over any parts of the estate (including the non-financial stuff like heirlooms or other objects).</p>
<p>My brother, who is a CPA, is financial executor. Close friends are listed to be legal guardian of our remaining minor child. Life insurance, retirement, everything goes into a family trust if something happens to us. Eventually I may change the financial executor as the kids get out on their own, but then again, it’s not a bad idea to have a level head to help out when you receive an unexpected windfall.</p>
<p>Yes, exactly. There are just parts of your life that are no one else’s business. </p>
<p>“Hey, they’re gonna find out when I’m gone, so they might as well know when it really matters, which is during college application and decision-making when they’ve had to be a part of the process.”</p>
<p>I get if it’s relevant to decision-making, but what if it’s not?
My H in particular is notoriously cheap (it’s kind of a family running joke how cheap he is), but my kids had sort of an epiphany when we were touring colleges. We were walking away from one college and he said something to the effect of - kids, you know what I haven’t asked about? And they started guessing all kinds of different things - you didn’t ask about dorms, or meal plans, or … or … And he said - notice how I haven’t asked the price of the different colleges. Because this is something that’s important enough that we want you to select on the basis of what suits you best and your mother and I have worked long and hard to be able to be in this situation. It was a pretty powerful moment for them, IMO.</p>
<p>Likewise, I distinctly remember being in high school - Princeton at the time was my dream school - and my parents sat me down at the kitchen table and said - honey, if you get in there - you can go, we can afford to send you. I cried and cried, I was so grateful. I didn’t need to know what they made to be grateful!!</p>
<p>“My daughter was learning about the social security system for a class. So I pulled up my statement online and showed her just how much (ie little) I can expect to get from it. I felt that was an important lesson.”</p>
<p>I think the bigger lesson is - when thinking about your ultimate planning, don’t expect / count on one penny from social security - so if you get it, it’s gravy!</p>
<p>Just to chime in with a point about your story, Pizzagirl… how grateful would you have been had you known all along that your folks were multimillionaires. (Not saying that they were- just wanting to make a point.) I think if children believe that the coffers are always going to be full for whatever they may need or want, there is a different sense of entitlement that almost unconsciously goes along with it. You might have appreciated it, but then again, you also kind of would have expected it.</p>
<p>It’s this kind of thinking that makes some parents cautious about revealing too much, and they don’t need to be multimillionaires to be concerned. Entitlement is rampant in our youth. And when they’re young, it’ss so much easier to tell your kids that something isn’t in the budget when they can’t do the math and argue. </p>
<p>When our were young, they were never very interested in how much money we made. We made enough to send them to the private colleges of their choice. What more did they need to know than that they had that possibility?</p>
<p>Now that the kids are in their own careers, and we are approaching retirement, they’re still not very interested in this topic. But we’ve begun to share some information in connection with estate planning. They will each have some responsibility for financial and health decisions in the future. Better for this not to come as a total shock, and without any prior planning.</p>
<p>Yes. You are exactly right, moonchild. I don’t need to open any doors of “but I know that you make (or you’ve saved) $xxx - how come I can’t do / get this thing that costs only $x? It’s only a teeny portion of your overall budget.” By that token, my kids could (theoretically) feel entitled to have had brand new cars on their 16th birthdays, or flown first class back and forth to school, or all other kinds of things I can technically “afford” without breaking the bank. </p>
<p>That is probably why the no-need-based-financial-aid parents are more likely to be less-revealing – they have no need to put any of the family finance information where the kids need it, can get to it, or can “reverse engineer” it (net price calculators, FAFSA, CSS/Profile).</p>
<p>Of course, merely being no-need-based-financial-aid does give the kid some idea of the range – but there are plenty of reasons why a parent would not want to make it too obvious that they are just barely in that range, or at a much higher level of income and wealth than the threshold (e.g. to avoid getting the kids into an “entitlement” mentality, or avoid the kids questioning why the family spends money carefully and frugally).</p>
<p>There seems to be a sort of sense that children who know they have a really good buffer against adversity will just quit working hard. That is the opposite of what I have seen in most cases. Knowing there is a financial buffer or safety net allows children to work hard in different ways. They may have the courage to do something outside the norm because they feel fairly confident they will never end up homeless. These kids can turn out to be the artists or the entrepreneurs. Sometimes they make it big financially and sometimes they don’t. At a certain point everything doesn’t have to be all about money. maybe. : )</p>
<p>I can only write this with a straight face because I was never worried about ending up homeless.</p>
<p>I wasn’t implying by the quote above that kids would necessarily stop working. I mean, you have to work pretty hard to even get in the range of being accepted to Princeton. My point is that, even if appreciation is there, expectation is also there when the money is obviously not an issue. And this can transfer to all kinds of things, like the new cars everyone else’s kid is getting, the newest fashions, the spring break trips, etc.<br>
There have been many examples on CC where kids take The Bank of Parents for granted. Some of us just want to mitigate that as much as possible, although we never can succeed altogether, I’m sure.</p>
<p>Moonchild can speak for me on this topic. This is exactly how I think. Just because I <em>could</em> afford to buy you a new wardrobe every season, or fly you first-class back and forth, or buy you a car to have on campus, doesn’t mean that I’m going to. And it’s a lot easier not to get into that when they don’t have a sense what’s actually in the bank. </p>
<p>Let’s put it another way. Let’s say you’re a member of a “known wealthy” family - the Kennedys, for example. Don’t you think it’s a little harder for a parent in that family to say to a kid - I’m not buying you a car when you turn 16 - when that kid KNOWS the whole family is loaded? </p>
<p>It seems to me parents at absolutely every income level sometimes become “The Bank of Parents.” Regardless how much money a family does or doesn’t have, it is important to teach children family values about money - what is worth spending on and what isn’t. They need to understand our values before they have the ability to start spending their own funds. I have very wealthy friends whose daughter never had anything fashionable until she had her own salary. She drove the oldest passed down car to college. As an adult, she is very careful how she spends. She models what she saw growing up, except she now has nicer clothes. : ) I really liked the post by Dadx upthread about not touching principal. I don’t understand how you teach that unless they know “principal” even exists.</p>
<p>ETA: I absolutely don’t think it is difficult for a “known wealthy” family to say “no” to kids. History is full of examples of children of the wealthy being kept on very low allowances to teach them the value of money.</p>
<p>OTOH, it may be easier to avoid the topic. </p>
<p>But I don’t need to tell my kids what <em>I</em> make or what <em>I</em> have in the bank to explain to them the concept of living off interest and not touching principal, or the importance of compound interest, or putting money into a 401K, or the difference between this kind of fund and that kind of fund. I think some in here are confusing “don’t tell my kids what I make” with “don’t explain financial concepts to kids.” </p>
<p>You may be right. I want my own kids to have the big picture about their future so they can plan accordingly. We aren’t fabulously wealthy but unless they are extremely profligate they will not end up homeless. They will probably always have a small safety net. They will probably not need it.</p>
<p>Values are taught by example, of course. I still drive my 2001 Toyota Highlander that I love, I’ve taken great care of it and I hope to get another 100,000 miles on it. Do the kids need to know that I could easily replace it with the newest Lexus in order to get the point that frugality has merits? I don’t think so. They see how we live, that we take care of what we have and that we aren’t frivolous spenders.
Values can be taught at all income levels, so you can certainly teach about not touching principle even if you have little principle to not touch. You can teach your kids anything if you live by those principles.</p>
<p>I had to laugh a couple of weeks ago when I drove up to Davis to see son and DIL, and my son frowned and commented that the seat belt strap on the driver’s side on my Highlander was slightly frayed. “This is a new (problem), isn’t it?” Like, hey son, you’re criticizing my 13-year old car!? Truth be known, I think he hopes to inherit it someday, even though he has a nice car of his own. By then mine will be an antique. :-)</p>
My point is that, even if appreciation is there, expectation is also there when the money is obviously not an issue. And this can transfer to all kinds of things, like the new cars everyone else’s kid is getting, the newest fashions, the spring break trips, etc.<br>