Little Boy on Dad's Shoulders

Don't Leave Them in the Dark

Recent studies suggest that many parents are reluctant to discuss their money matters with their children. It can be an uncomfortable topic to discuss, but if your children don’t have at least a basic understanding of your financial situation, you’re essentially leaving them in the dark.

Sooner or later – hopefully later – your remaining assets will transfer to your children, and a lack of communication can cause headaches down the road. If you were to pass away today, would your children know where your assets are held? How would they find them? Do they know where you intend for your assets to go? Will they need to pay estate taxes or other settlement costs? These are all questions your children should be able to answer.

Bringing your children into the conversation can also help them answer questions they may have already considered, but have been reluctant to bring up. Questions like, about how much might I inherit, and what impact could an inheritance have on my financial situation? As you discuss these matters, let them know what is important to you, what you have done in the past, what you are doing today, and what you plan to be doing in the future. This will help them appreciate what you have worked so hard to accumulate.

Involving your children can also help them avoid surprises. Unfortunately, individuals who inherit unexpected windfalls don’t always make the best decisions with their newfound wealth. It may give them a false sense of financial security. Inexperienced investors, for example, may try to retire early only to realize they didn’t have enough assets to meet their needs.

Bringing your children to your next meeting with your Stifel Financial Advisor is an excellent and non-threatening way to shed some light on your situation and help them build a relationship with your trusted advisor. Your assets are eventually going to transfer to your heirs with the lights on or off. You are doing a disservice by keeping them in the dark.