SPONSORED CONTENT -- (StatePoint) Money management is not only a logistical challenge for many families, it can be an emotional one too, especially when it comes to transferring wealth from one generation to the next. Open, honest conversations about your financial values and intentions can cut through some of the stress, and help family members avoid resentment, confusion and even legal strife down the line.
“With American Boomers poised to transfer an estimated $68-$124 trillion dollars to their Gen X, Millennial and Gen Z heirs by 2048, the time to have the conversation with your family about money and inheritance is right now,” says Heather Hunt-Ruddy, divisional leader, Wealth & Investment Management at Wells Fargo. “It starts with letting go of the notion that money is a topic to avoid.”
Hunt-Ruddy offers these tips to facilitate productive communication in your family:
Don’t wait to plan: Don’t postpone key decisions about your health, caregiving and estate until there is a crisis. Pressure can cloud judgment and lead to snap decisions. Worse still, a sudden illness or accident may leave you unable to speak for yourself. Get your house in order now – drawing up or updating an estate plan and other legal documents, selecting a power of attorney, and developing an advantageous strategy for wealth transfer – so that your wishes can be carried out as intended.
Don’t wait to share: Emergencies are also not the best time to share important decisions about your estate with your family. Begin the conversation intentionally and calmly.
Keep it up: Once the ice is broken, get into a rhythm of recurring financial conversations where you discuss goal-setting, review milestones and go over any updates or changes to your plans. It’s helpful to know in advance what topics you’d like to cover and who you’d like to be present for each conversation.
Set the tone: It’s important that financial conversations go beyond just numbers on the page. By maintaining a collaborative tone and leading with open-ended questions, you can foster a multi-sided dialogue that ensures everyone’s voices are heard, concerns are aired, and values are shared.
Prepare the next generation: Many younger adults lack financial know-how. To empower the next generation to manage the inheritance you leave them, as well as navigate their own finances, consider introducing them to the team that helped create your estate planning strategy, such as your attorney, financial advisor and CPA. It’s also helpful to recognize that their needs and preferences may differ from yours. For example, younger individuals may prefer holistic financial advice delivered digitally. Ultimately, you’ll want to ensure your children or other beneficiaries have both basic financial experience and are set up with a team they trust.
More insights on generational wealth and other financial topics can be found by visiting wellsfargoadvisors.com.
“To honor the values, hard work and hopes for the future that your wealth represents, don’t give the matter short shrift. Balance the art and science of preserving generational wealth not only with a smart financial strategy, but by inviting the next generation into the conversation early and often,” says Hunt-Ruddy.
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