It’s time to overcome the unspoken rule that money is a taboo topic, especially when it comes to family.
Sure, it can be an uncomfortable conversation, but when families are able to have open intergenerational conversations about finances, the resulting transparency can bring peace of mind to everyone.
Let’s explore reasons why families often avoid financial conversations, why it’s important to have intergenerational money talks, and finally tips for how to have these conversations.
Why Families Avoid Talking About Money
There are some common reasons why parents and their adult children or grandchildren avoid intergenerational financial conversations.
- Death can be an uncomfortable topic, and it’s unavoidable when discussing estate and inheritance.
- They feel like finances are personal and nobody else’s business.
- Some parents fear that if their adult kids know an inheritance is coming, they’ll rely on that rather than building their own wealth and saving for retirement.
- They worry that estate planning conversations will cause conflicts among adult kids and heirs.
- Some people mistakenly believe estate planning and financial conversations are only for the wealthy.
- Some are embarrassed to admit financial missteps or to talk about an inheritance that’s less than expected.
- Some parents feel like their kids are unprepared to manage money and don’t want to hand over control.
Check out these 7 Tips for Talking to Adult Kids About Inheritance.
The Importance of Intergenerational Financial Conversations
Avoiding financial conversations doesn’t prevent the inevitable. Life happens, and everyone will one day leave their earthly possessions behind. Discussions about money should be open and ongoing so that everyone is on the same page about wishes and expectations. Here are some more reasons why it’s important to talk to family about money.
- It’s crucial for adult kids and heirs to know what to do if a parent dies or becomes incapacitated. A document that details financial assets and entitlements with enough information that heirs can claim them is essential.
- Talking about money can help raise questions and concerns. If something is unclear about a person’s estate, knowing that sooner than later allows time to add more clarity. This helps avoid confusion and conflict when it’s time for heirs to receive their inheritance.
- Intergenerational financial conversations can help adult kids honor their parents’ wishes when it comes to their legacy.
- With unknown factors like the market, health or the need for long-term care, no inheritance is guaranteed. However, giving adult kids a general idea about how much inheritance they may expect can help them make decisions about their life. And as circumstances change, new expectations should be communicated.
Read these three things to consider about the Great Wealth Transfer.
3 Tips for Holding Intergenerational Financial Conversations
Talking about money with family can be hard, but these tips may help.
- Share Personal Experiences
Getting the money conversation rolling is challenging, but sharing personal experiences can help break the ice. For example, if a parent has a negative story regarding their parent’s estate, sharing that personal experience could spark a conversation about how they want their adult kids to have a different, better experience. - Keep Dialogue Going with Financial Literacy
Financial literacy is the ability to understand and effectively use financial skills, and developing a family’s financial literacy can help preserve generational wealth. Sharing books, financial articles and podcasts are easy ways to help improve a loved one’s financial literacy.Check out these tips on How to Teach Financial Literacy to Adult Children
- Meet With Your Financial Advisor as a Family
At the very least, adult kids should have contact information for their parent’s financial advisor. But what’s even better is for parents to bring their adult kids to meetings with their financial advisor. This can facilitate family conversations about money and help adult kids develop a relationship with a professional who knows the family’s financial situation well.
Want more? Check out our blogs, How to Start Talking to Your Kids About Money at an Early Age and 4 Ways to Help Your Family Avoid Probate.
Bankers Life Securities is Here for You and Your Family!
Our financial professionals are experts at building bridges between generations, facilitating big-picture planning conversations and affirming family core values. Reach out to our team to find out how we can help you and your family make the most of the estate you’ve worked so hard to earn.
