The money talk: A guide to revealing net worth and estate plans to heirs

Providing for others is one of the ways wealth can work for you, yet many families struggle with conversations around financial worth. Sometimes the concern is that heirs will become complacent and not build a solid understanding of and appreciation for what may be provided. But avoiding these conversations can mean a lost opportunity to impart values and behaviors that can lead your heirs toward impactful wealth stewardship.

How can you help ensure that your good fortune contributes to a lasting family legacy? Spend time intentionally planning on what, when, and how to talk to heirs about money and implement your communication plan. Here are some guidelines.

“Do as I say, not as I do” is typically not a successful strategy, so we recommend being conscious of the behavior you are role modeling through your estate planning strategies. Ask yourself questions like these to help you evaluate:

Does my current wealth transfer plan align with my goals and values? What do I want my wealth to provide for my children, and what values do I want to instill in the process? How will my heirs feel about my plans? Would I feel comfortable including them in the design of my plan? What do they think they already know from me, other family members, even what they find on the internet? What gaps do I need to fill in their financial education?

Keep in mind that you do not have to identify all of these considerations on your own. Engaging objective, experienced advisors — such as your legal, tax, financial advisors, family dynamics strategist and wealth planning strategist — at this stage can help you identify and work to mitigate potential concerns early on. They also can aid you in mapping out a communication process.

Communicating should be an ongoing process, not a one-time event. Consider a series of conversations over time, communicating about different aspects of your planning at each step. Offer to answer questions and serve as a sounding board for ideas, concerns, and fears. Encouraging this dialogue can help you to plan for which conversation to have next and who to include.

Also, consider scheduling time for these discussions in a quiet, neutral setting free from distractions. This helps to convey the importance of the topic to you and to them. Holding regular family meetings can be a good best practice to discuss family and financial matters.

Teaching your children about money management and providing opportunities for them to take responsibility and accountability for money helps to set the stage for later conversations around your estate planning strategies. It’s important to frame key messages in ways that match where your children are developmentally, including consideration of ages, learning styles, and life stages.

For many families, early lessons with children include fostering philanthropy through giving of time and money. Promoting hard work and instilling a sound work ethic helps children understand that entitlement does not outweigh responsibility. Providing opportunities for adult children to have a role and a voice in the family enterprise helps to build upon and advance wealth education.

Prioritize your wealth communication goals and align with your objectives, expectations, financial milestones, and distribution considerations.

Before discussing dollar amounts, consider focusing on the financial architecture of your estate planning strategies: education around the fundamentals of “trusts” and “estate planning strategies” may in itself take some time for children to understand.

Though discussions around money can feel challenging or awkward, err on the side of being as open, honest, and transparent as possible. Begin by providing context and meaning to the wealth by talking about family history, having discussions about individual and shared family values, and expressing honestly your hopes, expectations, and fears regarding what you’ve built up and set aside for your children or grandchildren.

Many parents worry about sharing too much too soon. Sharing information in stages can help to alleviate these concerns, allowing parents to control key messages and their timing while providing children with important information about money values, key financial concepts and, ultimately, your estate planning strategies in a manner that allows them to build a foundation of knowledge and understanding over time.

Wealth & Investment Management (WIM) offers financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Bank products and services are available through Wells Fargo Bank, N.A. Wells Fargo Trust is a part of WIM and offers services through Wells Fargo Bank, N.A. and Wells Fargo Delaware Trust Company, N.A.

Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.