Written by Margaret Weese
Financial issues are a taboo conversation, but they shouldn’t be
In recent years, many topics that families used to avoid have become common household terms.
It reminds me of a movie from the 1980s called “St. Elmo’s Fire.” In one scene, one of the characters decides it’s appropriate to whisper only certain words at a party that aren’t considered “dinner stuff.” It was about topics like “drugs,” “cancer,” and “prison.”
Since then, we’ve all become better at talking about those kinds of topics and other topics that were previously considered off-limits. But they haven’t all disappeared. Perhaps the biggest taboo that many of us still shudder to discuss remains.
It’s money.
Historically, discussing money and wealth has been considered a “taboo” (or at least a questionable hobby) in polite society. Wealthy families didn’t talk about how much money they had in the bank. This was a conversation for others.
As a result, it has become very common for wealthy families to avoid conversations about finances, putting children at a huge disadvantage in maintaining the family legacy, or even in gaining a solid understanding of money. It was decided that he would be killed.
In my role as a financial advisor for families, I often find that the biggest hurdle families face is getting to a place where they feel safe talking about money.
Indeed, these can often be difficult conversations. Often they deal with other ancillary issues that may involve heightened emotions. Death and dying, declining health, failing marriages, and questionable decisions can all come up as part of the conversation.
But I’ve also found that once a family agrees to go down this path, they can be in a better, more honest place with each other.
Having a conversation like this before an emotional moment occurs, considering the death of a beloved grandparent, will give you one less thing to deal with when you’re sad.
Also, and perhaps most importantly, these discussions and this process ensure that heirs clearly understand their wishes and have a true perspective on what they want their legacy to be. You can inform your relatives about this.
Here are some thoughts I share with my clients as we begin to consider these arguments.
Know the basics: The foundation of financial education should be both the hard skills of financial education, such as building a budget and understanding balance sheets. We then learn about the “soft” skills of finance, why we make certain financial decisions, and what financial decisions say about our values. Know Yourself: Not everyone is interested in or naturally adept at understanding financial terms and concepts. The technical aspects should be built over time. Just like building a house, you need to start with the foundation, make sure it is reinforced, and move on to the next step once a solid foundation is established. Learn by doing: Concepts stick better when they are applied, rather than taught in the abstract. . Rather than teaching her how to budget, have your child create a budget by charting her weekly expenses and categorizing those expenses into “wants” and “needs.” After that, we will help you regain the income you need to live. To understand how the stock market works, let your child pick stocks or, if you can afford it, let your child invest a small amount. Teach them how to research stocks and let them experience the ups and downs of the market. These exercises also help parents gain more insight into how their children will behave when larger amounts of money become available in the future. ‘Trust’ yourself: If trusts are part of your family’s financial situation, consider using an advisor to educate your children about the important roles and key provisions within trusts . This can be taught without revealing your financial situation. Unless you are comfortable giving your children a role in the trust such as co-trustee, this will give them ownership and responsibility while also providing them with the safety net of co-trusteeship. . Introducing children to the family’s key advisor is a financial lesson in itself and helps teach them about asset management, what they do, and what questions to ask. . Words and actions matter: Lessons about financial behavior are constantly being taught to you, your family, and your child’s peers through actions and comments. Therefore, it’s important to be intentional about what you communicate. Also, if you want these lessons to stick, reflecting on whether your words and actions are consistent with your values is an important element. Donate: Finally, if philanthropy is a part of your family, you can use it as a way to teach both hard and soft financial lessons. It can be used to create a forum to discuss family values while examining the economic impact.
This process has multiple steps and requires some thought and planning to execute correctly.
But by removing this last great taboo for your advisors, your heirs, and each other, we will all be in a happier, more honest place as we create our own legacies. can be noticed.
Margaret Weese is Chief Operating Officer of Wilmington Trust’s Emerald Family Office & Advisory and National Director of the Family Legacy Strategies practice.
This article is for general information purposes only and is not intended as an offer or solicitation for the sale of any financial product, service, or other professional advice. Wilmington Trust does not provide tax, legal, or accounting advice. Professional advice should always take into account your individual circumstances. Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services provided by certain subsidiaries of M&T Bank Corporation. (c) 2023 M&T Bank and its affiliates and subsidiaries. All rights reserved.
-Margaret Weese
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10/28/23 1525ET
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