How to Have Money Conversations That Matter

 

Conversations on legacy and inheritance can be hard. First, intergenerational discussions are often challenging, regardless of topic. Second, with social taboos against discussing either money or death, even within families, it’s easy to avoid the subject.

 

But don’t fall into that trap. The next generation shouldn’t have their legacy transition foisted upon them in the midst of grief, unprepared and without any plan.

 

“The families who do this well don’t wait for a transition—they build understanding over time,” said Jeanne Krigbaum, 1834 Chief Wealth Planning Officer.

The Four Concepts to Consider

By having a series of smaller discussions now, you can break through the discomfort and make sure that everyone within your family is on the same page. We recommend not focusing on the money itself first, but rather on what it means for you and future generations. There are four conversational pillars that can get you started—and give structure to your discussions.

 

Values. What does your family’s wealth represent? How do you conceive of it? For example, if you’re the person who built your family’s wealth from scratch, maybe it represents hard work. If you’ve been the steward of several generations of wealth, maybe it represents responsibility and care. Perhaps you value the security and peace of mind it offers—or the lifestyle flexibility.

 

Vision. What do you want your family’s wealth to enable going forward? Do you picture having a major philanthropic impact? Or the ability to double-down on your business and substantially expand operations? Or the opportunity for your children to pursue their dream career without worrying about finances?

 

Your Current Wealth Plan. A high-level discussion provides plenty of information—there’s no need to dig into details at the outset. In fact, we advise against early conversations including net worth—when beneficiaries hear specific numbers right away, it can create a one-track focus that detracts from their ability to think about stewardship. Instead, you want to share an outline of the family wealth as well as the basics about how the decision-makers within the family come to their decisions. What is the general process? What types of events and desires initiate a change in your financial plans? Who are your advisors and how do you work with them?

 

Roles and Expectations. As the younger generation gets older, they’ll need to know their place within the family wealth structure—and how they can incrementally gain the knowledge and experience they need to effectively manage it on their own. Benchmarks for the younger generation can be everything from building an independent career, to learning the family business, to simply starting to have a voice at the table. The goal is that everyone understands what’s expected of them now and in the years to come—and how they can achieve it.

How to Actually Do It: A Practical Playbook

The goal in your initial conversations isn’t for you to teach. It’s for you to listen.

 

You may have a set idea of the values and vision for the family’s wealth, so you may be surprised at how different it is for other family members. This is part of the exercise! Once you understand where everyone is coming from, it’s much easier to work together on a plan that suits everyone’s goals.

 

Start Small. Don’t bring spreadsheets to the first few meetings. You want to open by getting people thinking about family wealth and how they would use it. Simple conversations starters work fine:

 

• “What did money mean growing up for you?”
• “What would you want future generations to understand about our family?”
• “What are you most curious about financially?”

 

Keep the conversation to 30 minutes or less. Once you get people’s minds working, they’ll think more about it on their own.

 

Choose the Right Setting. It may feel convenient to have these conversations during the holidays, when everyone is around. It’s also a bad idea. When people are trying to relax and unwind, talking finances can backfire. Also, remember that holidays often have their own set of complex emotions. No need to add the family’s financial legacy to the mix! Instead, enjoy the holidays and plan on more neutral times to talk about your wealth. For example, if you live in the same area, plan a dinner around it every quarter. Or if you’re in more far-flung locales, consider a regular family zoom call, or start with one-on-one phone conversations.

 

Keep the Conversation Going. Passing on a legacy is a slow, gradual process. Ultimately, you’ll probably want the next generation to be making decisions in concert with you and your advisor. To get there, you need to build upon each conversation. Consider setting up a “Family Meeting Lite” where you talk for 20-30 minutes a few times a year. Each meeting should feel casual, but continue to grow knowledge and awareness, both for you (knowing the next generation’s wishes) and for the next generation (understanding your wishes and the shape of the family’s wealth).

Your Advisor Can Help

At 1834, our Wealth Advisors can even facilitate initial conversations between generations, with you as the primary driver of the discussion. As the next generation’s knowledge and confidence grows, we can also educate all generations on the typical process of a transition, serve as a sounding board for new ideas, and help identify solutions for specific wealth transition goals.

 

As a family-centered, planning-first advisory, we believe in a holistic approach to wealth: we’re ready to serve across generations. If you’d like to get started, please connect with us.