How and When to Talk to Your Children about Money
Whether you consider yourself wealthy or not, you need to think about how (and when) you’ll talk with your children about money. Financial experts suggest the discussion should happen in three stages during the child’s lifetime. Some experts even suggest talking with children about money at even earlier ages.
Here are some suggestions on when to talk about your family’s wealth, regardless of how much — or how little — money you have at the moment.
Tweens and Teens
The tween years (ages 10-12) are a good time to begin talking about family wealth. At this age, you should simply let your children know that family wealth is not just the money your family has — it involves all of the family resources.
Time, energy, attention, and money (TEAM) are key resources when it comes to family wealth. It also involves genetics, values, ancestry, connections, knowledge, and more. It’s a perfect time to talk with your children about your family story, discussing how you and their other relatives built the family wealth you have now, how decisions about money and goals have been made across generations, and how you hope decisions will be made in the future.
At this age, you can also let your children know that one day you won’t be here. Be open and honest about your intentions and what you may be able to pass on to them, as well as what they choose to do with their inheritance.
Young Adults 18+ and into their 20s
Once your children have moved out, they should be thinking about their own wealth and setting up legal documents so if something happens to them, no one gets stuck in court or conflict. They also need to know if you plan to offer them financial assistance, and if so, why you’ve set things up this way.
If you haven’t already shared your estate plan with them — including where to find it, why you’ve made your decisions, and how it will affect them — this is the time to do that. It’s also the time to introduce them to your family lawyer who can also help them iron out their own plans, now that they’re legal adults.
In their 30s and 40s
By their 30s, your children should be fully involved — understanding your plans and having set their own — especially if they have built a family of their own. By this time, you might be nearing or in retirement, so you’ll be able to know and discuss the actual value of the family’s wealth and prepare your children to effectively manage an inheritance.
You also want your children to know if they should plan to provide you financial support in your elder years. You can be proud of passing on what you’ve built during your lifetime, instead of waiting until death, and even invest in creating more family wealth together.
These conversations aren’t always easy, but they are so very important!
I Can Help.
I’m ready to facilitate these discussions and provide estate planning strategies to help protect everything you’ve worked so hard for and help your children become creators of more family wealth. Let’s set up structures that incentivize them to invest and grow their inheritance, rather than waste it or watch it be depleted within the court and probate system. Mention this article to find out how to get a $750 planning session with me at no charge.
