You pride yourself on being a great communicator. You can present to any board of directors, woo diverse clients and raise funds for your favorite charities without breaking a sweat. The same feels true when it comes to your children. You’ve bonded during vacations and over their academic triumphs (and failures); you’ve encouraged them to come to you with any problem so you can sort it out together. Yet, when it comes time to talking about your wealth – specifically, what will happen when they inherit it – you may find yourself tongue-tied. Maybe you were raised that talking about money is inappropriate; maybe you don’t want your kids to overly rely on your wealth or let it define them. Whatever the case, current events have reminded us that the time for procrastination is over. Here are some simple tips to keep in mind when you’re educating your heirs about financial literacy – specifically their responsibilities as the future stewards of your estate.
Make the conversation about more than your death. Oftentimes kids of any age will avoid talking about estate planning because they don’t want to think about the day you won’t be around. This not only brings up the feelings of loss, but about the obligations that will fall on their shoulders to run your business, manage your estate or both. This can actually be more difficult as your kids mature and you get older, because the inevitability feels more real.
The key here is to focus, not on your absence, but on their role in continuing the family legacy. Get them excited about your company by explaining what it has achieved, including any plans for future expansion and the benefits it provides to society. If they already know about or are involved in your business, talk to them about a greater role they can play in its successes moving forward. You can also discuss your philanthropic efforts and what your contributions have helped charitable organizations achieve.
Acknowledge that generations communicate differently. This is a big one. Most studies around this involve the workplace – where for the first time in history there are five generations trying to collaborate effectively – but it certainly impacts personal relationships as well. For example, if you’re a Baby Boomer or even a Generation Xer, you’re more likely to value face-to-face discussions, and access information via email or in print, while millennials and members of Generation Z (born after 1997) are more comfortable communicating via texting and social media. If not navigated carefully, these differences can easily result in miscommunication.
They will also likely inform the way your children choose to manage your wealth; for example, they may prefer to use technology, such as an all-in-one solution, to keep track of their holdings, rather than having to be in constant communication with financial advisors. Furthermore, younger generations tend to have very different management and leaderships styles, so this certainly something to discuss, especially if they will be taking a more active role in the family business.
Look at the family dynamic. You must take into account your children’s unique personalities and ways of communicating. For example, the way you speak to your daughter, with whom you’ve always shared a special bond, may be very different from the way you speak with the son you hear from every once in a while.
In our next post, we’ll address the issue of sibling rivalry and how approach estate planning in a way that brings your children together, rather than driving them apart.
