How to Talk to Adult Children About Money

By Martin Northern

Over the years, I’ve had plenty of conversations with clients who have done a good job building and protecting wealth but find one part of planning particularly difficult: talking about it with their children.

I understand the hesitation. You may not want your children to know every detail of your finances. You may worry that discussing an inheritance could change expectations. Or perhaps money simply wasn’t something your family talked about growing up. But you don’t have to begin with numbers.

Four young adults standing arm in arm on a grassy hilltop, seen from behind as they look out at the sunset. — Photo by Helena Lopes on Unsplash

Start With What Matters

A better place to begin may be the why behind your planning.

What did it take to build what you have? What values influenced the financial decisions you made along the way? What do you hope your resources will accomplish for your family, your community, or organizations you care about?

Charles Schwab’s estate-planning guidance encourages families to discuss the values, vision, and purpose behind their wealth.¹ Schwab also notes that conversations about an estate do not have to begin with the amount being inherited; discussing the thinking and intentions behind the plan can help reduce confusion and conflict later.²

That doesn’t mean handing your children a balance sheet. It means giving them enough context to understand the plan.

Make Sure They Know Their Role

If an adult child may someday serve as an executor, trustee, financial power of attorney, or healthcare decision-maker, that responsibility should not come as a surprise.

Schwab identifies these trusted roles as important parts of an estate plan.³ It also recommends organizing key documents and making sure the appropriate people know where and how to access important information when it is needed.⁴

You might begin by asking yourself:

What do I want my children to understand about our family’s financial values?
What responsibilities might they someday have?
Do they know where important documents are kept?
Do they know whom to contact—our attorney, CPA, or financial advisor—if help is needed?

Creating a family wealth mission statement can also provide a framework for these conversations by helping families articulate the values and purpose they want their wealth to support across generations.⁵

Make It a Conversation, Not an Event

There is no requirement that everything be discussed in one family meeting. Start with what feels appropriate, allow questions, and revisit the conversation as circumstances change.

A financial advisor or estate-planning attorney can also help facilitate a productive discussion when needed. Schwab’s estate-planning resources include guidance designed to help families begin these conversations and address important planning topics over time.¹

After decades in this business, I’ve come to believe that a financial legacy is about more than the assets you leave behind. It is also about how well you prepare the people who may someday be responsible for them.

At Northern Capital Management, we talk about finding your “True North.” Part of that is helping the people you care about understand not only what you have planned, but why.

That clarity may be one of the most valuable things you pass along.

Previous postWhen Life Changes, Your Financial Plan Should Evolve With You

Talking to Your Adult Children About Money: Start With the “Why”

Start With What Matters

Make Sure They Know Their Role

Make It a Conversation, Not an Event

Sources