NEWS & RESOURCES

Authored by: Jason Underwood, CFP®, Financial Advisor

As parents, we often strive to protect and provide for our children throughout their lives. One crucial aspect of that care is discussing money matters and inheritances openly and honestly. However, initiating a conversation about these sensitive topics with your children can be challenging, as it involves discussing financial issues, family values and the future.

First-generation planning most likely focuses on preparing you and your spouse for retirement at the earliest opportunity. On the other hand, second-generation planning aims to ensure that your financial resources are sufficient to support you throughout your lifetime and leaves a legacy for your children. Here’s how you can get started.

Choose the Right Time and Setting

The first step in discussing this topic with your children is to find the right time and setting. Avoid springing the conversation on them during stressful moments or large family gatherings, as it can lead to unnecessary tension. Instead, pick a time when everyone is relaxed and can dedicate enough time to the discussion. I recommend having a conversation over the holidays when you’re together, and it can be a casual conversation over dinner or when you’re gathered around instead of surprising them with an unexpected phone call.

Write Down a Plan to Pass on Your Information

According to a Gallup poll, nearly half of Americans aged 50 to 64 lack a will. This fact is worrisome because passing away without a will means your assets will be distributed according to the laws of intestate succession. While these laws typically divide assets evenly among heirs, they lack discretion, potentially leading to conflicts among your children—especially if you haven’t discussed your intentions with them beforehand.

To ensure your estate is well-organized, consider the following steps:

• Compile a comprehensive list of your bank accounts, investment portfolios, debts (such as mortgages), insurance policies, pension plans, and other financial assets and liabilities.
• Provide the names and contact information of any professionals—such as financial advisors, lawyers or accountants—who may play a role in handling your affairs after your passing.
• Draft a will detailing precisely how and where you want your assets to be distributed upon your demise, thereby minimizing ambiguities and misunderstandings.

Leaving your heirs an organized estate is one of the most valuable gifts you can give them. Dealing with the emotional turmoil of a loved one’s passing is challenging enough without the added stress of unraveling a complex financial situation. Initiate conversations early and ensure your records remain current to alleviate potential burdens for your family during a difficult time.

Create a Comprehensive Estate Plan

A well-thought-out estate plan ensures that your assets and inheritances are distributed according to your wishes. An estate plan can ensure your multigenerational family wealth planning will be executed, even if you are not here to see it through to completion fully. You can communicate your final wishes through a will, and a trust will provide the legal support to protect your hard-earned assets.

Emphasize the Importance of Financial Literacy

Financial literacy is a vital life skill that everyone should possess. During your conversation, take the opportunity to educate your adult children about responsible money management, investment strategies and the significance of budgeting. Encourage them to seek professional financial advice to make informed decisions for their own financial future. Our team enjoys assisting our clients’ children as they reach a certain age, just as we have helped their parents. We aim to establish a strong bond and provide guidance as they navigate through adulthood and build their financial futures.

We consider our clients our family and want to ensure that everything you’ve worked so hard for is passed on to loved ones who are well-prepared for the future. That’s why we like for our wealth management to be intergenerational. If you have any questions or would like us to meet with your children to discuss any money matters associated with your account or set them up with an account of their own, visit our website at cnccpa.com or give us a call at (509) 663-1661.