As parents, we often strive to protect and provide for our children throughout their lives. One crucial aspect of that care is discussing money matters and inheritances openly and honestly. However, initiating a conversation about these sensitive topics with your children can be challenging, as it involves discussing financial issues, family values and the future.
First-generation planning most likely focuses on preparing you and your spouse for retirement at the earliest opportunity. On the other hand, second-generation planning aims to ensure that your financial resources are sufficient to support you throughout your lifetime and leaves a legacy for your children. Here’s how you can get started.
Choose the Right Time and Setting
The first step in discussing this topic with your children is to find the right time and setting. Avoid springing the conversation on them during stressful moments or family gatherings, as it can lead to unnecessary tension. Instead, pick a time when everyone is relaxed and can dedicate enough time to the discussion. I recommend having a conversation over the holidays when you’re together, and it can be a casual conversation over dinner or when you’re gathered around together instead of surprising them by an unexpected phone call.
Understand Their Perspective
Remember that your children may have their own beliefs, values and financial priorities when discussing money. Be empathetic and try to understand their perspective. Some children might be uncomfortable discussing your wealth, while others may feel entitled to certain assets. By actively listening to their thoughts, you can address any concerns and work together toward a fair and mutually agreeable solution.
Emphasize the Importance of Financial Literacy
Financial literacy is a vital life skill that everyone should possess. During your conversation, take the opportunity to educate your adult children about responsible money management, investment strategies and the significance of budgeting. Encourage them to seek professional financial advice to make informed decisions for their own financial future. Our team enjoys assisting our clients' children as they reach a certain age, just as we have helped their parents. We aim to establish a strong bond and provide guidance as they navigate through adulthood and build their financial futures.
Create a Comprehensive Estate Plan
A well-thought-out estate plan ensures that your assets and inheritances are distributed according to your wishes. An estate plan can ensure your multigenerational family wealth planning will be executed, even if you are not here to see it through to completion fully. You can communicate your final wishes through a Will, and a Trust will provide the legal support to protect your hard-earned assets.
Plan for Long-Term Care
Discussing long-term care and end-of-life arrangements is equally essential. Ensure your children know your health care wishes, living will, and existing long-term care insurance plans. Addressing these matters can relieve your children from making difficult decisions during emotionally charged situations.
We consider our clients our family and want to ensure that everything you’ve worked so hard for is passed on to loved ones who are well-prepared for the future. That’s why we like to ensure that our wealth management is intergenerational. If you have any questions or would like us to meet with your children to discuss any money matters associated with your account or set them up with an account of their own, please contact our office.