Stagner said Voya advisors start new client conversations asking about the family and who else is dependent on the client.
“So many of our clients are in the sandwich generation, helping both children and parents,” he said. “We can make sure everyone is on the same page. But it is a touchy subject. Oftentimes, one spouse is more willing to help a child than the other.
“You know how they tell you on an airplane to put on your own oxygen mask first and then aid someone else?” Stagner said. “That’s what we tell clients. Make sure you are OK, and then see how much you can help others.”
He recalled two clients who were going through marriage counseling; the father wanted to cut the kids off completely and the mother wanted to continue to help them financially. The kids reached a compromise with the parents, agreeing to pay for certain things but not others.
“We laid out a plan and told [the couple] what would happen if they continued with the level of support they were providing. We put the plan in writing to make sure they would stick to it,” Stagner said.
“Some parents actually do a contract with the kids. One couple put in the contract that the kids were not going to be able to move back in with the parents once they graduated from college.”
In such arrangements, parents can set out specific goals for the kids and allot for specific dollar amounts.
This type of agreement can be important for both middle-class and affluent clients for different reasons, Stagner said. For high-net-worth clients, it is important that the children know what the parents want their legacy to be.
“Financial education is always important for the children, whether the parents are affluent or not,” he added. “Children need to know the power of saving and investing. That education cannot start early enough.”