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Keeping family in the financial loop

Financial regulators are more concerned about older investors suffering from cognitive loss and exposure to fraud. Isabelle Wiemero explains how it helps to inform family members or other trusted contacts about important financial information. Isabelle spoke with Joel Dresang in a Money Talk Video. A transcript of their conversation follows.

Joel Dresang: Isabelle, the National Endowment for Financial Education did a survey and found that 86% of American adults would trust somebody in their family to make financial decisions for them in the case that they wouldn’t be able to, but the same survey found that a majority of Americans aren’t comfortable talking with their family about money. What do you make of that?

Isabelle Wiemero:   Yeah, a lot of people don’t like to talk about money with their family, but often something happens unexpectedly, especially when you’re older, and you’ll need another person or people to assist you when you can no longer help yourself. And federal regulators have become much more concerned with protecting older investors when they begin to lose their cognitive skills or potentially become a target of fraud, and your family is a good first line of defense for that.

Joel: And some of those efforts include getting contact information for trusted individuals. Not just family members, but somebody else that you trust. Why is it so important to have somebody in the loop about your finances?

Isabelle: So, there’s two parts to this. There’s your side and then your family’s side. For you, it can give you peace of mind to know that there’s another person that you trust that knows what your plans are for your nest egg that you’ve worked so hard to build up. For your family, it helps prepare them so they’re not left trying to put the pieces together if and when that time does come.

Joel: So, what should investors do?

Isabelle: So at a minimum, there’s three things you can do to get started.

First, have all of your financial information organized. Where do you hold accounts? What types of accounts are they, and what are each of them intended for? Also, do you know where your will is or any other legal documents?

Second, you want to make sure all this information is in a safe and secure place and a place where this person would be able to access it if they needed to.

And then third, is communicating all of this with that person. Let them know that you plan to trust them with this responsibility and talk to them about where they’re going to be able to find all this information and what other resources are going to be available to them.

Joel: And what about having that contact information for the trusted individual?

Isabelle: Right. It’s really important that you also let your advisor know who this person is going to be and that they have their contact information already on file in case they need it to get ahold of them.

Joel: To be clear, this isn’t about sharing all of your financial information. It’s just about getting somebody in the loop so they know where the information is.

Isabelle: That’s right. As a baseline, you at least want this person to know where they’re going to go to get all this information, but it’s really best to get them in the loop as early as possible and have those tough conversations ahead of time. The more that they know, the more that they’re going to be able to help you down the road.

Joel: And this isn’t something that people necessarily have to do by themselves. They can ask for help, right?

Isabelle: You’re not in this by yourself, and we often facilitate these discussions with our clients. You can get your family members involved by bringing them to a meeting with your financial advisor. It’s a really good way to make sure that everyone who’s involved is on the same page.

Isabelle Wiemero is an investment advisor at Landaas & Company.

Joel Dresang is vice president-communications at Landaas & Company.

Money Talk Video by Peter May and Jason Scuglik

Learn more
Trusted Contacts for Your Sake, information on trusted contact forms
When a loved one passes, what happens to their accounts? by the Financial Industry Regulatory Authority
Securing elder finances, by Joel Dresang
Retirement spending with heirs in mind, a Money Talk Video with Dave Sandstrom
Investing for two – for the long run, a Money Talk Video with Isabelle Wiemero
5 tips for naming beneficiaries, a Money Talk Video with Mike Hoelzl
When Should I …check my beneficiaries? by Art Rothschild and Isabelle Wiemero

(initially posted July 20, 2018)

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