Do we have secret family money?

And if we don’t, how can I help make you comfortable?

This month, we’re talking about money and relationships. Last week, we dove into money and marriage. Today, we’re tackling money and families. Let’s try to avoid matricide if we can.

Key Takeaways

• Knowing if you’ll be expected to support your aging parents is extremely helpful when planning your own financial future.

• Approach money conversations with preparation and empathy. A structured, judgment-free conversation is key to tackling sensitive financial topics.

• Plan for different outcomes. Whether your parents have wealth, limited means, or financial challenges, steps like hiring a financial planner or exploring government programs can make all the difference.

If you know someone who bought a home before turning 35, odds are they had some help—beyond diligent saving. Nearly half of younger homebuyers receive monetary gifts from family to help with their down payment. According to Redfin, about 38% of young home buyers reported using a cash gift or inheritance to afford their homes. Anecdotally, my own clients and friends confirm this.

If you had help, should you disclose it? Should you feel shame? Does it matter?

We should all stop worrying so much about what others think and look to our own messy families and ask, “Do we have secret family money I should know about?” And if you're spitting out your seltzer at the sheer absurdity of asking this question to a mother or father figure, how about another question,

“Coming from a place of love, and in the interest of planning my own financial future, can we have a conversation about your financial needs?”

These questions aim to answer the age-old question in personal finance, “Do I have enough money to cover my basic needs and wants now and in the future?”

How much is enough?

There’s a good dad joke in the financial planner space that goes, “If you tell me the day you’ll die, I can tell you exactly how much money you’ll need to save.” Har har.

But that fear of not having enough money isn’t just reliant on YOU and your ability to save and not spend too much money on shit you don’t need…it’s reliant on your parents. Have they been diligent savers who happened to be born at the right time to get a well-paying job, cheap housing, and ride 50 years of unchecked American economic growth in the stock market?

Are they sitting on a pile of money so vast there’s no way they could possibly spend it all in their lifetime, or are they like 25% of Americans that have nothing saved for retirement?

Perhaps they’ve been hit with some bad luck, medical issues, systemic inequality, or something else where money is scarce, and it’s likely they will need help from their kin (aka YOU) to support their lifestyle and cover basic living expenses.

It’s imperative that as you think about your financial future, you prepare for what inheritance may be coming, or what expenditure you may incur. When I worked with clients, I would never allow them to count on an inheritance in the financial plan even if they roughly knew what the sum would be. You’re probably thinking, are you kidding me? My parents and I can barely agree on who is making the pie for Thanksgiving. Do you think we’re going to have an open and honest conversation about money?

Tolstoy said it well at the opening of Anna Karenina,

“Happy families are all alike; every unhappy family is unhappy in its own way.”

I think he meant that it’s no use complaining about your fucked-up family because every family has its issues. Your own strained relationship with your parents is not rare, but it does have its own unique flavor.

Back in 2021, I wrote a little guide called “How to Talk to Your Parents About Money, Aging, and Death,” which you may find helpful. It’s about the very practical steps you should absolutely try to take with your parents to prepare for the worst—do they have access to their accounts, do you have the name of their financial advisor, and do they have a will?

Mommy, How Much Money Do You Have?

But today I want to talk about an even harder conversation–how to dig into the nasty grimy bits of your parents’ financial situation.

It will help you unpack your financial situation, and it will feel like a giant weight has been lifted off of your shoulders.

Buckle up, we’re going to ask our parents how much money they have.

First, you’ll forward this newsletter to your parents with the following note: “Hello, I’m getting my financial life together, and I could really use your help. As I plan for my own future, I want to make sure I’m including you, and my primary objective is to make sure you’re well cared for.”

As Chappel Roan says, “It’s casual.” It’s just a casual chat about an emotional bomb of a topic.

Let’s play “Would You Rather?”

Would you rather tell your parents how much money you have and your salary or tell them how often you have sex and what gets you off? How about your parents - would you rather know how much money your parents have or would you rather know about their masturbation habits?

Now, the money conversation doesn’t seem so bad, does it? Let’s get into it.

This is not going to be fun. But it won't be worse than knowing nothing. And it certainly won’t be worse than your loved ones living out their final decades in fear of judgment. Fear and shame are so inextricably linked to money so we’ll attempt to blow past all of that.

Sadly, there are many suicides related to money issues. The Money and Mental Health Policy Institute attempted to quantify the role money played in suicide in England and the results were that more than 100,000 people in debt attempt suicide each year. Let’s take small steps to mitigate that and get these conversations going sooner.

Approach this conversation lightly but with urgency. Remember, you absolutely cannot have a complete financial plan without knowing if you will have to provide monetary support to help a family member. And you will not make them feel bad about it.

If you think your family is too messy or too quick to anger, get help. Ask a mediator. But my best advice is just to get some time on the calendar. It can be a Zoom or Facetime if your family is far away (mine is). Just get them on the phone, explain why you’re curious, and get down to it.

You might ask questions like these. In fact, it may be easier to go from a script, so feel free to share these before the chat.

Questions to Get Things Going

• Do you have enough money to live the life you want to live?

• Do we have secret family money and where is it?

• If I need money in the next 5-10 years, is there any you have to spare?

• Would it be okay if we looked at your investment accounts together?

• Are there any properties that you own, and who is on the deed?

• Are there any financial advisors, accountants, lawyers, insurance agents or other professionals involved in your financial life? Can you share their contact info and make a warm introduction?

• How do you want to spend the last five years of your life, and how do you want to die? (you know, just for fun)

Expect surprises, handle them with grace, and do not judge someone for previously concealing a lot of wealth or a serious lack of it.

Recommendations

If there is secret family money.

Don’t wait till death, give $19,000 away every year.

If your parental figure is in a wonderful position to give away money while they are living, let’s get right to it. Why are we saving money till death?

Gifts of cash or property can have extremely meaningful impacts on the younger generation. For example, a grandmother can pay for her grandchild to go to the special language school across town that the parents couldn’t afford. Maybe it’s just the gift of taking away a young couple's financial stress. Or it’s help with a downpayment on a home. Money changes everything, remember.

Afraid of taxes or complexity? Just give cash under the “annual exclusion limit,” which is $19,000 PER PERSON in 2025. That means an elderly married couple could give their son and daughter-in-law $76,000 dollars every single year without having to report anything for taxes¹. And by the way, if you do give or receive more than that - it’s just one little easy tax form you need to file - NO ACTUAL GIFT TAX GETS PAID UNTIL AFTER YOU’RE DEAD.

Side note: I’ve polled friends about this: would you take the money? While some say they would take any help they can get, a surprising number say that they would not accept cash gifts from family. I’m very interested in this decision and will be diving into it in a future issue.

If there is no secret family money.

Communicate often and get a financial planner because it’s going to be tight.

Here’s where I’m going to tell it to you straight: you need a trusted financial planner to help manage the numbers here and you have to get it in your parents’ head: if they don’t get this right, it will cause you financial stress. For many Americans, “retirement” - aka not running out of money is going to be a delicate dance. Perhaps there is enough money saved, but some careful budgeting is required. Maybe downsizing to a smaller house is required. These are big important decisions that are going to cause stress and potentially destroy relationships if the loving suggestions come at the wrong place or the wrong time. There are likely 401(k)s, social security checks, some cash, and maybe a pension. A professional needs to get in there and understand how much income is coming in and what the expenses are and adjust the investment portfolio accordingly. Please, for the love of god, get your parents a financial planner, and don’t leave this up to them. Get someone from NAPFA who is going to act as a fiduciary and not try to sell them annuities.

If there is no money at all.

You’ll have to navigate what support you can give and help navigate aid from government assistance programs like Social Security and Medicaid.

Understand the options. There are many government assistance programs, but many require careful planning. You’ll absolutely need to rely on Medicaid and Social Security for assistance, so make sure you and your parents understand how to get the most benefit possible.

• Read up on how to qualify for Medicaid, as some extra special planning to potentially move assets around could be required.

• Medicaid programs are state-run, so find your state’s website here as a first step.

• Understand how to maximize Social Security benefits².

Practical guidelines for getting the “Do we have secret family money?” conversation going

These chats are not easy, so let's remove all possible barriers. Treat this like an appointment with a financial advisor and set it up as such. This signals that you’re serious and that this matters to your well-being.

• Make sure no one is hungry or dehydrated.

• Make sure everyone takes their meds: maybe that's an Advil for a headache or an ADHD medication.

• Make sure everyone is comfortable and can view the documents or screen (that means bring your reading glasses).

• Prepare to be shocked, and keep your emotions in check.

• Do not be snarky, sarcastic, or mean under any circumstance (I’m the worst at this).

• Be patient, you likely will not get all this information in one Zoom call. Schedule a follow-up for a few weeks from now (not months).

Dealing with and talking about money is painful for many of us. So having a process to follow, or even better, shelling out your hard-earned money to pay someone to help you confront it, is one of the only ways I know how to get this shit done.

What if they say no?

Unfortunately, the likely outcome here is that your parents will simply say no. Perhaps they don’t want to be open and honest with you about their financial situation because they are embarrassed, feel awkward, disorganized, or just simply don’t think it’s any of your goddamn business. The best advice I can give you is to keep trying. Maybe it won’t happen this year or next year. Sadly, it may take a terrible forcing mechanism like the death of another family member to get this to see how terribly important being open and honest about money is.

Godspeed!

Parting shot: don’t let fear of confrontation lead to decades of distrust and disaster at death.

The best $20 bucks I spent this week: I’m reading James³ by Percival Everett. It’s a retelling of Huckleberry Finn from Jim’s perspective. $14.99.

1. That’s $19,000 x 4: $19,000 from each older spouse gifted to each younger spouse.

2. The Consumer Financial Protection Bureau is a good place to understand these benefits. Here’s the page on how to calculate the best age to claim social security.

3. Do you know about Bookshop.org? You should. You can buy your books from independent booksellers instead of Jeff Bezos. Books are quickly shipped to your home, but a local independent bookstore gets credit for the sale!