Many people who have accumulated wealth want to keep the money in the family. However, discussing that wealth can make for an awkward conversation. Some people see conversations about money, even with loved ones, as taboo, while others don’t want their children or grandchildren to lose their motivation or work ethic if they know they have a significant inheritance coming.
According to USA Today, 64 percent of people do not have an estate plan. The apprehension to talk about money is natural, but it could be contributing to the startling statistics related to wealth and estate planning. Failing to make an estate plan can have significant consequences for business owners and people with diversified portfolios.
Although many people have a plan in the back of their mind, it isn’t official until it’s in writing. Without an estate plan, the state will decide how assets are divided, which may not be in accordance with those intentions. Some may want to donate a significant portion of their wealth to charity while the law would pass it on to children and spouses. How can wealthy parents and grandparents tactfully talk to their family about money? For some, it starts at a young age.
Teach children and family how to manage money themselves
Many people can become financially stable on their own when they understand the basics of business and the value of a dollar. One father quoted in Washington Post said he encouraged his nine-year-old daughter to set up a lemonade stand and calculate expenses compared to profit off of each glass sold.
Unveil wealth and estate plans incrementally as loved ones age
Another business owner said he had his children begin working at his business by age 12. Then, when his kids turn 18, he discusses his estate plan on the way to speak with the family’s attorney. The father said he doesn’t even sit in on his children’s meetings with the attorney. Instead, he treats it as one step into the rite of passage into adulthood.
Speak with an estate planning attorney about the available options
Making an estate plan requires a candid conversation with loved ones. That conversation can be prefaced with a visit to a probate and estate planning law firm to begin outlining the future. Keep in mind that it is okay for a plan to be rewritten as situations change. A plan can also include wishes for medical care and the managing of digital assets.
Even if assets are liquid or subject to fluctuation, this can be accounted for with the right legal plan in place. While many people are unsure of how much money they have to their name or how they will pass it on, clarity starts by speaking with an attorney who understands the probate and estate planning process.