Americans are moving beyond taboos regarding family financial planning, study finds

Americans have historically disliked discussing financial matters among family members, but a recent study by Fidelity Investments found that attitudes toward… Topics of forbidden wealth It turns.

Sincerity Wealth mobility case study It found that 56% of Americans did not discuss family finances with their parents when they were children. Among this group, 82% wish they had, because they believe it would have been beneficial to have a financial education at an early age.

It also found that Americans’ attitudes toward those conversations are changing, with 83% of respondents saying it’s important to talk about these conversations. Money management With children, 67% of parents already talk to their children about family finances.

“Money and wealth is one of the topics we historically don’t like to talk about,” David Peterson, head of advanced wealth solutions at Fidelity Investments, told FOX Business. “Wealth is a deeply personal experience, so, in some ways, it is not surprising that people have historically been uncomfortable talking about it.”

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“The study indicated that people are starting to kind of break that vicious cycle of avoiding family discussions. And it’s clear that if we connect that to… Transfer of wealth between generations“This is kind of a generational difference, and what we found is that older people generally don’t feel comfortable talking about it,” Peterson said.

Peterson said many Americans have experienced the complications that can arise when a parent who has not been open about their finances begins to deteriorate, and family members have to step in to help take care of their finances.

“When people start to reach the end of their lives, and suddenly they can’t manage their finances or no longer have the ability to make decisions about them, that’s where you start to see things go a little sideways, because they haven’t shared with their families what their wealth is, where it’s at. Wealth, and what it consists of.” “And you can very quickly find yourself in a situation where, during a really emotional time in life, people are now worried, ‘Well, how can we actually manage mom and dad’s finances when they can no longer do it themselves?’

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He said it’s important for families to have documentation that includes a health care or health care proxy to delegate To help navigate the health care system, as well as a will with instructions about the individual’s hopes for it. A financial power of attorney that entrusts someone to act on their behalf in financial matters is another key document.

Families should also think about other documents and designations needed for end-of-life, Peterson said. Brokerage accounts Ownership that can be shared with rights of survivorship can be transferred very easily to the surviving owner, while beneficiary designations can also be included to transfer accounts on death to the beneficiary.

He added: “You need a will, which will take into account all the things that you do not have the right of ownership or designate a beneficiary over.” “And then, in some cases, it may be helpful to have a trust and put the assets in that trust so they can be passed down, similar to an account with a beneficiary designation. The trust will then determine who is going to get all of those assets that are in the trust.”

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Peterson suggested that to begin work it may be helpful to do so with the understanding that it is unlikely to be a one-time conversation but rather a process of relieving some of the pressures and emotions surrounding those conversations.

“I think for some people, following a very strict path to what you’re going to talk about works very well; in other cases it doesn’t, and my recommendation is not to go into a conversation thinking it’s going to be a conversation that’s going to be a difficult conversation,” Peterson said. “Look, I “I work in this field, and I remember having a conversation with my father, who’s passed away now, and you’d think it would be easy for me, but it’s not, because these things are wrapped up in all kinds of emotions.”

He explained that sharing some details about financial accounts and touchpoints can also be a good first step, even if it does not necessarily lead to full disclosure of details of the older person’s wealth.

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“Given that older generations in particular are not necessarily willing to reveal all the details of their wealth, what I often recommend is that they at least share what it is, not necessarily the amount, but where it is; and who the key people to their wealth are.” “Calling in case a family member has to find out more about this and keeping all of that stuff in a place where people can easily find it,” Peterson said.

“Maybe the first step is just doing a really solid inventory of what’s there, like a balance sheet, a wealth statement, a net worth statement, whatever you want to call it — but just that list of things so that when someone has to act on it they’re “At least they know where it’s going.” That way, you can protect that sensitivity about how much money is in all these different accounts or… Banks or financial institutions“.

Regardless of the process individual families use to build their financial plans, the Fidelity study found that having a plan is a confidence booster. While about four in 10 Americans are concerned about losing their wealth, 78% of those with a financial plan said they were confident they took the right steps to build and protect their wealth, compared to 26% and 27%, respectively, of those with a financial plan. No plans.