How to Talk to Your Family About Your Wealth

Talking to your children and/or grandchildren about wealth can be a daunting task. There is no one-size-fits-all approach and is based on your children/grandchildren’s situation and maturity.  A simple question such as, “If you were to win the lottery, what would you do with all the money?”, can be a great way to gauge their maturity and determine the level of details that can be discussed. It is also a good way to measure their financial knowledge and start a conversation about financial topics such as type of accounts, type of investments, the power of compound growth, etc.

General topics based on age

Teens - Depending on their level of maturity, this can be a great time to discuss simple financial concepts. Talk to them about how fortunate they are to have parents or grandparents who work hard to provide them with a good life, the importance of living below your means to enable yourself to invest for your future, and to give back to those less fortunate. You could even go as far as creating a family mission or value statement.

20’s - This is the time to start discussing more details, but not exact values. Talk about the assets the family owns, whether it be stocks, bonds, real estate, or a business. You can discuss how to protect those assets with insurance, the types of accounts used, allocation of those investments and why. Some of these topics might require other professionals such as an accountant, estate planning attorney, insurance agent or financial advisor to be involved. This is also the time to share stories of how the wealth was created and maintained, and that it requires proactive effort to build and keep wealth.

30’s+ - This tends to be the age when people are starting to have families of their own and are mature enough to have specifics shared with them. It can be a good idea, if you have multiple children/grandchildren, to have a family meeting to share the specifics with everyone all at once. This can remove the opportunity for one or more children to feel slighted or left out of the discussion. It can also be effective to have a trusted financial professional to help facilitate the discussion and explain more complex topics such as Powers of Attorney, how the estate plan is structured, who the executor of the estate will be and their role in the process. 

Being an executor is a thankless yet important task in which most people do not have the knowledge or expertise to serve as the sole responsible person. Most will need help from other professionals to fulfill their duties and obligations. Our website includes a Personal Document Locator which will help organize your information and will assist your executor. 

Although each family is different, we believe it is important to discuss finances with them.  An initial meeting followed by on-going conversations will serve to make family members aware of the overall situation, provide opportunities to educate the next generation and set them up to be financially successful as well.