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Americans have historically been reluctant to discuss financial matters within their families, but a recent study by Fidelity Investments found that attitudes toward the taboo topic of wealth are changing.
Fidelity's Research on wealth mobility It was found that 56% of Americans did not discuss family finances with their parents when they were children. Of this group, 82% believe it would have been beneficial to receive financial education earlier and wish they had received it.
The study also found that Americans' attitudes toward these discussions are changing, with 83% of respondents saying it's important to discuss money management with their children and 67% of parents already discussing household finances with their children. The answer was yes.
“Money and wealth is notoriously one of the topics that we historically don't like to talk about,” David Peterson, head of advanced asset solutions at Fidelity Investments, told FOX Business. Ta. “Wealth is like a very personal experience, so in some ways it's not surprising that people have historically been reluctant to talk about it.”
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Americans' attitudes toward once-taboo financial conversations are softening, a Fidelity survey found. (license/image)
“This study showed that people are starting to break the cycle of avoiding family discussions. And clearly, when you link this to intergenerational wealth transfers, it's a kind of generational difference, and we What we found is that older people are generally less comfortable talking about it,'' Peterson said.
Peterson said many Americans have experienced the complex situation that can arise when a parent who hasn't been very open about family finances begins to decline and family members have to step in to take care of the household finances. He said he was doing it.
“When people get towards the end of their lives and suddenly they no longer have control over their money or the ability to make financial decisions, you start to see things go a little sideways. “I don't share with my family what it is, where the wealth is, what it's made of,” he said. “And at a very emotional time in life, people can quickly find themselves in a situation where they're worried about how they're actually going to manage mom and dad's money that they can no longer manage themselves. there is.”
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Peterson suggested that families approach financial discussions as a process rather than trying to handle them all at once. (St. Petersburg)
She said it's important for families to have documents in place to help them navigate the health care system, such as a health care power of attorney or health care power of attorney and a living will that describes the person's wishes regarding that. A financial power of attorney, which authorizes someone to act on your behalf in financial matters, is also an important document.
Families should also consider other end-of-life documents and designations, Peterson said. Brokerage accounts that allow joint ownership with right of survivorship are very easy to transfer to surviving owners and can also include beneficiary designations to transfer the account to a beneficiary upon death.
“You need a will. The will will account for everything that doesn't actually have ownership or beneficiary designations,” he added. “And in some cases, it may be beneficial to set up a trust and put assets into that trust so that they can be transferred, similar to an account with beneficiary designations. Define who gets all the assets in a trust. ”
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A study by Fidelity found that people who have a financial plan feel more confident about building and protecting their wealth. (license/image)
Peterson says it can be helpful to negotiate with the understanding that it's not a one-time conversation, but more likely a process to relieve the pressure and emotions that come with it. He suggested that there was.
“I think having a very strict plan for what you're going to talk about works for some people, but sometimes it doesn't. What I recommend is that you don't go into a conversation thinking it's going to go well. It's a conversation that's over. This is a difficult conversation,” Peterson said. “Look, I was in business, and I remember having a conversation with my now-deceased father. You'd think it would be easy for me, but it's not. There are all kinds of things that go into these things. Because it involves “emotions''. ”
He explained that sharing details about financial accounts and contacts can also be a good first step, even if it does not necessarily lead to full disclosure of the details of a senior's assets.
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“Given that older generations in particular don't necessarily want to reveal all the details of their wealth, I often recommend at least knowing what it is, not necessarily the amount, but where it is, the wealth. “It's about sharing who the key people are in protecting your family. Contact them if they want to know more about it, and keep all of this in a place where people can find it,” Peterson said. Ta.
“Probably the first step is to take a really good inventory of what's out there, a balance sheet, a statement of assets, a statement of net worth, whatever you want to call it. But when someone has to act, “Just make this list so you're prepared, so at least they know where to go,” he explained. “That way, you can protect your sense of how much money you have in different accounts, banks, and financial institutions.”
Regardless of the process individual families use to develop their financial plans, the Fidelity study found that having a plan increases confidence. About 4 in 10 Americans worry about losing their wealth, but 78% who have a financial plan feel confident they are taking the right steps to build and protect their wealth. Of those who said they have, 26% and 27%, respectively, are worried about losing their wealth. without a plan.
