Are Your Clients’ Kids Ready for the Talk About Inheritance Planning?

Money. Religion. Politics. Where to go for dinner.

As humans, we tend to shy away from uncomfortable conversations. Inheritance planning may feel like one of those off-limits topics of discussion, but it shouldn’t be.

According to a Wells Fargo Wealth & Investment Management survey, parents talk with their children about money, but more than a third say their heirs have little or no knowledge of their inheritance plans.¹

Most parents avoid the topic because they don’t want to raise children who feel entitled or unmotivated. Other parents aren’t ready to think about their own mortality or worry their children are too young for the inheritance talk.

First, no age or time frame makes a child ready. Every family and every situation is different. Regardless of your children’s maturity level, your plan can be designed specifically for you.

For example, you could have assets that are distributed outright, or assets could be managed by a trustee and held in a trust until children reach a specific age.

Whatever the case may be, it is important to have an open and honest dialogue so the next generation isn’t blindsided.

Here are some tips and strategies to help get the inheritance conversation started. Remember: The earlier you start, the better.

• Family meetings are key.
• The parents set the agenda.
• Consider an independent party to run the meeting.
• Always open the floor for questions from your children.
• Listen and be willing to adjust.

Developing an inheritance plan is a process that requires feedback and conversation. Money can create division, or, with the right education, it can bring a family closer, working together toward a unifying vision.

Is your family on the same page? Here are eight simple questions to ask yourself.

1. Does your family have a wealth mission statement?
2. Are your heirs incentivized by the family’s wealth mission?
3. Are all family members included in important financial decisions, including defining the mission and management of assets?
4. Do your heirs understand what’s expected of them, and have they expressed their support and agreement?
5. Have you shared your estate plan and documents with your heirs?
6. Are assets distributed based on readiness to accept wealth rather than age?  
7. Are the younger children encouraged to participate in your family’s philanthropic grant-making decisions?
8. Is family unity equally as important to you as family financial strength?

Above all else, don’t get overwhelmed. If you’d like to discuss inheritance planning further, feel free to reply to this email so we can help you design a strategy for your family.