At our firm we regularly talk with families about the importance of having open money conversations. This can also be helpful when it comes to talking about family inheritances. A CNBC article by Kelli Grant on the topic of family inheritances recently pointed out that, according to a recent Ameriprise financial report, “Only 21 percent of parents expecting to leave an inheritance to their children have told them how much they will receive.”
Why is this? The article points out that some are afraid that having detailed inheritance conversations will lead to family tension, or perhaps result in children making bad financial decisions. But it also points out, according to Marcy Keckler, a vice president at Ameriprise Financial, that “there are plenty of good reasons to share specifics with your heirs…. Doing so gives you a chance to head off family fights on controversial or unexpected plans — such as leaving money to a pet, for example; splitting money unequally among children; or leaving someone out of the will….”
Grant goes on to point out that candid money conversations can align children’s and parents’ expectations, help children be more prepared, and can help ensure that parents’ wishes are effectively accomplished. The full article has some helpful statistics on wealth transfers amongst families and also offers some tips on how families can successfully broach the topic.