In many families, money, with regard to how much individual family members make and have, is a taboo subject. Discussing one’s wealth and assets or lack thereof, can be an uncomfortable topic and this can be especially true for parents who struggle to discuss topics related to their personal wealth and the transfer of that wealth with grown children.
Within the next 40 years, individuals who make up the Baby Boomer generation are expected to pass on an estimated $30 trillion to their children and other heirs. While many Baby Boomers expect to pass on wealth to future generations, the results of a 2014 study indicate that many parents and their grown children fail to communicate about and are therefore not on the same page when it comes to inheritance matters.
Findings from Fidelity’s 2014 Intra-Family Generational Finance Study revealed that 40 percent of parents “have not had detailed discussions with their adult children,” about a host of estate planning issues, including the transfer of wealth. Additionally 10 percent of study participants hadn’t taken any steps to discuss issues related to a will, a long-term care plan or inheritance with an adult child.
This growing communication gap is contributing to many misconceptions for both parents and adult children. For example, only six percent of parents said they expect a grown son or daughter to take on caregiving duties as they age. However, 43 percent of adult children reported planning to take on such duties. Additionally, at 56 percent, a significant percentage of adult children believe that their parents lack sufficient finances and are concerned about their financial security. In reality, however, only 23 percent of parents admitted to worrying about such matters.
When it comes to issues related to estate planning, parents would be wise to start talking to their grown children about their future plans and wishes. Failing to address these types of important matters can lead to further miscommunication and hard feelings and ultimately erode the relationship between parents, children and siblings.
Source: Wealth Management, “Clear Communication May Help You Capitalize On Coming Wealth Transfer Wave,” Aug. 28, 2015