Discussing Family Wealth

The topic of family wealth often brings a fair amount of apprehension with it. Openly discussing wealth feels like a taboo subject and one that should be avoided at all costs. The talk may feel daunting, but it’s an important one to have with your kids. If they are not prepared to inherit a large sum of money, then they are bound to make mistakes. Here’s a few tips on starting the conversation and what the younger generation needs to know about the family’s wealth.

Rip off the Band-Aid

The first step to opening a money dialogue is initiating the conversation. It may be uncomfortable and family opinions may vary, but no matter what, the discussion needs to happen. It will be easier on everyone if the topic is laid out on the table at once and intelligently discussed. At the end of the day, you will feel better for speaking about it and your children will feel much more prepared for the future.

Use Teachable Moments

The inheritance and financial planning conversation will not feel as daunting if your children are exposed to the idea in small, real life increments. These teachable moments will feel less like a hard and fast talk about the family money and much more about the idea of money. For instance, the birth of a new family member is the perfect time to organically discuss inheritance. Your children will understand inheritance, but may not directly apply it to themselves yet. That’s perfectly okay! At the very least, the building blocks will be there come time for the “big talk.”

Keep the Dialogue Open

The money talk should not be an open and closed conversation. Family wealth is complex and evolves over time – so should your conversation. Closing the door after the initial conversation will cause confusion and potentially leaves a lot of questions unanswered. The transition of wealth is a delicate matter and should be treated as such. Be an open book for your children and let them openly discuss wealth. They will develop ideas on their own about how to best use the family wealth and you need to be open to that. By doing so, you ensure that less mistakes are made down the line. Trial by fire, especially with money, is not always the best way to learn.