There’s something fun about a good mystery, especially around Halloween. But when it comes to your family’s financial future, leaving behind a trail of unanswered questions is anything but entertaining.
You’ve likely spent years thinking about your financial future. You’ve made retirement decisions, planned how to use your savings, and thought about what you hope to leave behind. But how much of that thinking have you shared with the people closest to you?
Your family may have a general idea of your finances without truly understanding the goals behind your financial plan. And when those goals involve future generations, keeping everyone in the dark can create confusion or unintended expectations.
Your Financial Plan Tells a Bigger Story
A financial plan is about more than investments, account balances and retirement projections. It reflects what you’ve worked for, the decisions you’ve made along the way and what you want your money to accomplish.
Maybe you’ve prioritized saving for retirement because maintaining your independence is important to you. Perhaps you’d like to help your grandchildren pay for college, support a charitable organization or leave an inheritance that gives your children more financial flexibility.
These goals often affect the whole family, yet the conversations around them don’t always happen.
Sharing the reasoning behind your financial decisions helps loved ones better understand your priorities. It also gives you a chance to explain what you hope your financial resources will accomplish, both during your lifetime and beyond.
Bridging the Generational Gap
Different generations often have different relationships with money. Experiences growing up, financial challenges and personal values all shape how we think about saving, spending and building wealth.
Those differences matter most when discussing family wealth.
For example, parents may intend to leave an inheritance but only after enjoying retirement first. Their adult children, meanwhile, may have entirely different assumptions about what that inheritance will look like. Without a conversation, those assumptions can become expectations.
Multigenerational financial planning gives families room to discuss these differences before making important decisions. It also allows younger generations to learn from the financial experiences of parents and grandparents while beginning to think about their own goals.
Sharing Your Plan Doesn’t Mean Sharing Everything
Understandably, not everyone is comfortable discussing personal finances with family. And you don’t need to reveal every account balance or detail of your estate plan to have a productive conversation.
Start with the goals that matter most to you.
Talk about what you’re planning for retirement, how you think about supporting family members financially, or why charitable giving has become part of your plan.
Invite your family to share their perspectives, too. You may discover that what you’ve assumed is important to the next generation doesn’t quite match what they envision for themselves.
These discussions can be especially valuable when major life changes occur, such as retirement, marriage, the birth of a grandchild or changes in family responsibilities.
Bring the Next Generation Into the Conversation
Your financial advisor can be a valuable resource in facilitating these discussions. Consider inviting adult children or other family members to join part of a planning meeting, especially when your goals or decisions may eventually affect them.
Allowing the next generation to understand your financial philosophy can also encourage them to become more involved in their own financial planning.
Ultimately, you’ve put time and thought into deciding what you want your financial future to look like. Sharing those intentions with your family helps them understand the purpose behind your decisions rather than leaving them to make assumptions.
This Halloween, keep the mysteries for the movies. Your family’s financial future deserves a conversation.
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.
6032131 EXP: 10/31/2029