How and why families should share information about money and values
Family conversations can empower rising generation wealth inheritors with the knowledge and skills to navigate their financial lives. Yet many parents and grandparents struggle to talk openly about their estate planning with those affected by their plans, and, on the flipside, children are reluctant to ask questions for fear of being seen as greedy or nosy.
It’s no secret that family money is a loaded topic that can cause angst between the generations and among siblings. Sometimes the concern is that rising gen inheritors will become complacent, anxious, or frustrated and not build a solid appreciation for what may be coming to them.
Why do human beings struggle with talking about money?
We speak to many parents who carry a deeply held conviction that talking about money with children is inappropriate or can be “too much too soon.” Some admit that they feel awkward or uncomfortable having money conversations with adult children. This is sometimes related to the money conversations that did or didn’t happen in their own families when they, too, were young adults. But avoiding these conversations can mean a lost opportunity to impart values and behaviors that can lead inheritors toward impactful management of their own financial lives over time.
Based on our research and experience, younger generations want to learn more about their family’s financial standing. We suggest families look at these critical conversations as opportunities to empower inheritors to help them become financially fluent, competent, and confident.
Rising gen thoughts on family money
As it turns out, rising gen wealth stakeholders think quite a bit about the support they currently receive from parents, potential inheritances, and how they will manage what they receive.
Wells Fargo Wealth & Investment Management recently conducted a national survey of 551 rising gen adults in their 20s and 30s who expect to inherit at least $1 million from their parents.1
Through the survey, we learned that half of rising gen inheritors think often about what they stand to gain – with 41% thinking about how much money their parents’ have and 48% reporting that they also regularly think about what they will do with their inheritances once received
However, money conversations with parents are not happening as frequently as they should, with 73% of rising gen members saying they rely on their own research for information about money management. While 64% of respondents in the study indicated they also learn about money management from conversations with parents, 81% reported that they would value having more structured family meetings to discuss money topics like an inheritance. Absent this structure, 44% of wealth inheritors report being uncomfortable talking with their parents about their wealth.
A perhaps related finding is that 52% feel that initiating such conversations with their parents might make them appear greedy or entitled.
81% [of rising gen survey respondents] reported that they would value having more structured family meetings to discuss money topics.
But money is not the only thing on the minds of these young adults. In fact, 86% of rising gen inheritors in the study suggested that the most important thing they will inherit from their parents is their values, not their money. Yet, 46% also report that their parents rarely or never have conversations with them about money values and the roles that money plays in their lives.
A related finding in the study is that 66% of inheritors report their parents rarely or never discuss money values as they relate to charitable giving. This is an interesting data point given that 34% of survey respondents say improving the world is one of their goals in having money.
What does this data tell us? Those surveyed reported that some critical conversations about money are happening in their families, but a clear desire for cross-generational communication emerged in the study. In fact, rising gen inheritors reported that their conversations with parents focus more on topics like work and family, rather than the topic of money.
Taking action
We’re big advocates of using research and data to facilitate shared conversations in families about money, values, and expectations.
Having a firm grasp on the realities of what is available, and when it might be coming, helps rising gen wealth inheritors prepare more realistically for their own financial lives. It’s an exciting opportunity for families, from our perspective, to leverage and curate the often hard-won successes of prior generations and provide opportunities for younger generations to serve as stewards of the family’s financial success.
To help families get started, here are ways to structure conversations that can prove fruitful for both parents and children.
Set yourself up for success. An underlying message throughout the survey is to communicate about money regularly and with purpose. Communicating should be an ongoing process, not a one-time event. We like to suggest to all families that that they have a “family money meeting” at least once a month. Consider a series of conversations over time, communicating about different aspects of money. Ask and answer questions – cross-generational dialogue requires collaboration – and openly discuss ideas, concerns, and fears. Taking the time to do this reinforces the simple fact that money is something to prioritize and regularly discuss.
Establish meeting details. Rising Gen survey respondents cited the desire for structured family conversations around money. Consider scheduling time for these discussions in a quiet, neutral setting free from distractions. This helps to convey the importance of the topic and provides healthy boundaries.
Share history and values first. Before talking specifics, it will provide context to family members by talking about both individual and shared family values around money.
Be candid. Though discussions around money can feel challenging, awkward, or taboo, err on the side of being as open, honest, and transparent as possible. Many parents worry about sharing too much too soon, even when their children are in their 20s and 30s. Sharing information in stages can help to alleviate these concerns, allowing parents to control key messages and their timing while providing adult inheritors with important information about money values and key financial concepts in a manner that allows them to build a foundation of knowledge and understanding over time.
Keep everyone in the loop. Every member of your family has different financial needs and goals. Someone may want to start a business or someone else may have a child with special needs. As a family, though, it is important you include everyone in the discussions.
Dive in. Whether you’re the child or the parent, you can’t wait to find the perfect moment to get started. Waiting for complete information or a formal agenda is not necessary. You can get started with a simple question and go from there with regular discussions. Our conversation starters link under Additional Resources can provide a launching pad to get the conversation going.
The Rising Gen survey findings include more insights into the younger generation perspective on money, family, finances, and the future. Read our Research Reveal for additional insights that can lead to productive family conversations.
Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company.
1Versta Research conducted a national survey on behalf of WIM. Survey participants were drawn from national online research panels. Assuming no sampling bias, the maximum margin of sampling error is ±4%. In addition, 10 interviews of WIM Rising Gen clients were conducted by Ipsos. In-depth interview subjects were identified and recruited with the assistance of WIM advisors in various regions across the U.S. All research — quantitative and qualitative — was conducted in January and February of 2022.
Wells Fargo & Company and its affiliates do not provide legal or tax advice. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
