Why Don’t Parents Talk about Money? - Nelson Elder Care Law & Estate Planning in Georgia
Required

Why Don’t Parents Talk about Money?

Families are often reluctant to talk about wealth and inheritance with their children. However, experts say that can create confusion and insecurity.

Parents talk with their children during various stages of their lives about the challenges ahead. The tough talks about sex, drugs, drinking, driving, bullying and mental health are understood as a necessary part of good parenting. However, why, asks The New York Times, don’t they talk to their children about money? The answers are presented in the article “4 Reasons Parents Don’t Discuss Money (and Why They Should).”

Two-thirds of Americans with at least $3 million in investable assets have not spoken with their children about their wealth—and say they never will. This was the surprise conclusion from a Merrill Private Wealth Management study of 650 families. Some said they didn’t because they figured the kids had already figured it out. However,67% of those respondents had made gifts in a trust or set aside money in their children’s names to pay for school, buy a home or help them out with income. Ten percent steadfastly said they won’t talk with their kids about money, saying it’s no one’s business.

Why are parents so reluctant to have the “money talk” with their kids?

The Motivation Factor. Parents are concerned that knowing about an inheritance will destroy a child’s motivation. They think if they don’t say anything, the kids won’t know about the inheritance.  However, children are smarter than that. They know how to find out the value of their homes, the cars their parents drive and how much vacations cost. For prominent parents, there may be all sorts of information online about their assets. By second grade, children who go to their friend’s houses have a pretty accurate read on wealth levels. Education about money should start when they are in nursery school, not when they are 24 and asking for a new car.

Not Knowing What to Say. Parents have certain markers for certain conversations with their children. When they are able to get a learner’s permit, we talk with them about driving, drinking and safety. When it is clear that they are becoming teenagers, we talk with them about sex, personal safety and responsibility. However, there’s no set time to have a conversation about money, and few guidelines. Do you start with a conversation about family values and the responsibility the wealthy have towards the community? Should you explain how the household runs and where the money comes from? Or, should they get a better understanding of what it took to amass the family’s wealth, and what strategies are in place to protect and grow that money?

You may not need to educate an 8-year-old on buying stocks, but they should certainly understand the value of their allowance. On the other hand, an 18-year-old is old enough to understand where the money came from and what the family’s values and expectations are.

No One Had the Talk with You. One of the survey respondents shared a very personal story: she had started talking with her children about the family’s money when they were young, but she herself did not know how much money the family had. She found out only much later when the children were older, when she learned that a share of her husband’s business had skyrocketed in value, as had several of his other businesses. Since then, the family has held annual meetings with the children to talk about their feelings about money and how it can be used to help and hurt.

Money is New to Your Family. Families that come from multiple generations of wealth have succeeded in passing wealth to the next generation, because of the conversations that have gone on for years. Those who talk early and often about wealth with their children do far better than those who keep silent. The families follow this key three step process: educate the children about finances and wealth, communicate the family’s values and hire very good advisors.

Reference: The New York Times (Aug. 2, 2019) “4 Reasons Parents Don’t Discuss Money (and Why They Should).”

Hear From Our Clients
tes-prev
tes-next

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce

Josh Nelson, and his staff, have been amazingly helpful to our family. The ins and outs of nursing homes, the rules and regulations that govern Medicare and Medicaid are daunting and the folks at Nelson Elder Care Law have been informative, responsive, and above all, empathetic. I cannot emphasize enough how their service has taken a weight off of our shoulders especially during a world pandemic that has targeted nursing homes across our country. I highly recommend retaining Josh and his firm!

- Marcia

I had a simple legal question to them that I needed answered and they very helpful in giving me the information I needed. I highly recommend them and will reach out to them if I need more advice or assistance. Thank you for taking your time to just answer a couple of questions I had!

- Ben