It can be tricky to talk about money with your family. Whether it’s financial planning, wealth management, or future inheritance, many people feel uncomfortable addressing the topic. Yet, as Morgan Stanley outlines, having these discussions is crucial to preparing for the future.
Before diving into how to have these conversations, it’s essential to understand why they’re often avoided. Many families avoid discussing money because it brings up complicated emotions, such as embarrassment, guilt, or shame.
Parents might hesitate to discuss their wealth with children, fearing it could affect their values or ambition. Conversely, adult children may avoid asking their parents about their finances for fear of overstepping boundaries.
Understanding these emotional barriers is the first step to overcoming them. The key is approaching the conversation with sensitivity and openness, focusing on long-term goals rather than current financial details.
Talking to your children about family wealth can be as challenging as speaking with parents. Many parents fear sharing too much information about money will affect their children's work ethic or sense of responsibility.
However, having open conversations about money can help your children develop a healthy understanding of financial responsibility and family values. Start by discussing what money means to your family—why you’ve worked hard to earn it, what goals you have for it and what responsibilities come with managing it.
Rather than delivering a lecture, ask your children questions that encourage them to think about wealth and responsibility. You might ask, “What does it mean to be wealthy?” or “Why do you think financial planning is important?”
Approaching a conversation about money with aging parents can be intimidating. However, handling it with care is important. Rather than diving straight into numbers and documents, ease into the discussion by asking them about their thoughts on long-term care, retirement and other financial concerns.
Frame the conversation around ensuring that their wishes are respected. For example, you might say, "I want to make sure we're all prepared in case anything happens and that your wishes are honored."
Having a general idea of their financial situation and being prepared can help guide the conversation. Consider whether they have a will, a plan for long-term care, or any trusts. However, remember that the focus should be on understanding their desires and values, not just the details of their finances.
Family wealth discussions are more than just talking about dollar amounts; they are about ensuring that everyone understands the values and goals behind the money. Talking openly with your family about finances can relieve stress, align expectations and ensure that everyone’s values are respected.
If you are unsure how to begin these critical conversations, consider seeking professional guidance. An estate plan can provide peace of mind for you and your family. Schedule a consultation with our law firm today to learn how we can help you prepare for these conversations and plan.
Reference: Morgan Stanley (2018) “How to Have Meaningful Family Conversations About Money”
