Talking About Money: Navigating Wealth Transfers Across Generations

As financial advisors, we have the privilege of working with numerous families, witnessing their triumphs, heartbreaks, milestones, and life transitions. Over the years, one consistent theme has emerged – the reluctance, and sometimes outright fear of, discussing financial matters between generations. The topic of money remains a sensitive one, entwined with pride, independence, and often secrecy.

Parents, particularly those who have built significant wealth, grapple with how and when to share financial information with their children. They wonder, “How much should I disclose? Will it affect their work ethic? How do I ensure fairness among my children?”

Meanwhile, children, particularly as they step into adulthood and realize the responsibilities that come with it, often wonder, “Are my parents properly set up for the future? How can I approach my parents about their wealth without seeming greedy or disrespectful? What if they need care later in life? What happens to their assets upon their passing? How do I ensure their wishes can be met?”

Let’s address these concerns from two points of view and common questions we often hear.

Parents: Opening Up the Conversation

  1. When should I start the conversation? It’s never too early. Start discussions when you’re healthy and clear-minded. This not only provides clarity but also alleviates the emotional burden during times of crisis.
  2. How detailed should I be? Share what you’re comfortable with. Initially, you don’t need to divulge exact numbers. Discussing your family’s values, financial philosophies, and general intentions can be a good start.
  3. How can I ensure equity among my children? Fair does not always mean equal. Discuss your rationale with your children. Some parents choose to divide their estate equally, while others might adjust based on perceived need or past support. Remember that there is no right or wrong approach to asset distribution.
  4. Should I discuss each of my estate planning documents? Yes. Unexpected surprises can lead to family conflicts. Transparency can mitigate potential misunderstandings. It is important to discuss your plan so that it can be honored.
  5. What if I change my mind later? Your financial decisions aren’t set in stone. Families evolve, and so might your wishes. Maintain open communication. As Certified Financial Planner professionals, we recommend that you review your estate planning documents every three to five years and have them reviewed by an attorney every five to seven years. This helps ensure that your wishes haven’t changed and that your documents continue to meet the current law/standards of your state. We recommend you use this three-to-seven-year rule of thumb for conversations with your family members as well.

Children: Approaching the Topic Tactfully

  1. How can I bring up the subject with respect so that they know we have the best intentions? Frame the conversation around preparedness, concern, and ensuring that your parents’ wishes are honored. It’s not about what you might get, but about understanding and supporting their intentions.
  2. How can I better understand their long-term care plans? Broach this by expressing genuine concern for their well-being in the future. Discuss topics like insurance, potential care needs, and their desires regarding living arrangements. This is especially important if you are part of their care plan.
  3. What if my siblings and I have differing opinions on wealth distribution? Open dialogue is key. Understand your parents’ perspective and share your feelings with your siblings. Avoid turning financial discussions into emotional disputes. During these conversations, it’s important to remember that you are talking about your parents’ wealth and wishes. Your parents’ opinion is the one that truly matters when planning for the distribution of their wealth.
  4. Should I ask about power of attorney or healthcare directives? Absolutely. These are not just about finances but also about making informed decisions during emergencies. Conversations about health care decisions are imperative so that the agent is able to know the parents’ desires when/if the time comes.
  5. How can I encourage my parents to seek professional advice? Emphasize the benefits of financial planning, optimized tax strategies, and the peace of mind that comes with a structured estate plan.

Conquering the Money Stigma

At the heart of these concerns lies the age-old stigma surrounding money discussions. Breaking this barrier is crucial. These conversations not only clarify financial directions but also provide an opportunity for families to bond, understand shared values, and establish legacies.

To successfully navigate this terrain, consider these steps:

  1. Choose the Right Setting: A relaxed environment, even a scheduled party or dinner gathering that celebrates your family, could help break the ice.
  2. Be Transparent: Honesty minimizes misunderstandings.
  3. Seek External Mediation: Financial advisors can facilitate and structure these discussions. They can even host a gathering in their office if that is preferred by the family.
  4. Respect Privacy: Everyone has boundaries. Respect when someone isn’t ready to share.
  5. Focus on Guiding Principles: Beyond dollars and cents, discuss what values and legacies parents want to leave behind.

Remember, wealth is not just about money. It encompasses family values, legacies, and memories. Open, thoughtful conversations about money can pave the way for a harmonious familial future.

To learn more, watch our webinar on de-stigmatizing money conversations with family here.

Wealthspire Advisors is the common brand and trade name used by Wealthspire Advisors LLC, Private Ocean, LLC, and Heron Financial Group, LLC, separately registered investment advisers and subsidiary companies of NFP Corp. © 2024 Wealthspire Advisors.
Please Note: Limitations. The achievement of any professional designation, certification, degree, or license, recognition by publications, media, or other organizations, membership in any professional organization, or any amount of prior experience or success, should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results or satisfaction if Wealthspire is engaged, or continues to be engaged, to provide investment advisory services.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, Certified Financial Planner, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Razi Hecht

About Razi Hecht, CFP®

Razi is a wealth advisor in our Delafield, Wisconsin office.

View all posts by and

Julie Williams

About Julie Williams, ADPA®, ChFC®, CFP®

Julie is a wealth advisor in our Delafield, Wisconsin office.

View all posts by and

Related Posts

Markets in 2 Minutes – May 2024

In the newest edition of Markets in 2 Minutes, Connor Darrell of the Investment Team provides a recap of the ...

Capital Market Assumptions 2024

Resetting Expectations: 2024 Capital Market Assumptions

Each year, our Investment Team undertakes a comprehensive review of our capital market assumptions (CMAs) across asset classes. CMAs serve ...