It’s Not Polite to Talk about Money!

Dr. David Ashby | Mar 13, 2023

There’s a chance you grew up in a home where finances were not discussed. My folks didn’t talk about money, but I think it’s because we didn’t have any. Dad made an average living as a feed salesman and Mom was a stay-at-home mom raising six children. The only discussions I recall about finances were which bills to pay this month and which to put off until the next month.

But for families that did have money back then, the subject was often off the table. If you talked about finances with the kids, it could be construed as being boastful and arrogant. So the family’s financial situation was generally off-limits. That may have loosened up a bit over the years, But I still run into folks who don’t share financial information with their children, even though their children are in their 50s and 60s!

Ed Slott is a financial advisor in New York and arguably the nation’s foremost expert on Individual Retirement Accounts, or IRAs. But he advises clients on issues beyond the IRA realm, and he strongly encourages family conversations about finances. Ed suggests doing this during the holidays when families are gathered together. While that makes sense logistically, it might put a damper on things to be discussing money over Christmas dinner.

There’s a lot to be gained by having a frank discussion with other family members about your financial situation. I’m amazed at how many folks I run into that have no will or trust in place to direct disposition of their assets at their passing. You want to direct who gets what rather than have state law do it for you. But you must have documents in place to do that. Having a discussion with family members about your assets and final wishes can highlight areas like this that need to be dealt with. Hopefully, such a discussion motivates you to see an attorney. Besides a will or a trust or both, an attorney may also suggest you put in place powers of attorney. This designates someone to act on your behalf in the event you are incapacitated.

If you put together a will or a trust, this forces you to think about the distribution of assets at your passing. You may have it in your mind who gets the pink dishes. You have even told your daughter that you want her to have them. But do the other siblings know that? Better to have it in writing to avoid a conflict. It’s also possible that nobody wants those ugly pink dishes anyway. It’s been my observation over the

years that kids aren’t necessarily as attached to items as you are. And I know you think your children are different. There may be an item or two that they want to keep. But I see estate sales where they are selling everything down to the home canned tomatoes.

If your child stands to inherit a significant chunk of money and you‘re worried they may blow it on the way home from your funeral, there’s an app for that. It’s called a trust, a legal mechanism that allows you to control, to some extent, your assets from the grave.

Discussions about family finances also help avoid the chance of assets being lost. A paid-up life insurance policy purchased 30 years ago could easily be overlooked. Better to let the kids know what you have and where to find relevant documents than to risk assets not being discovered.

Suppose you are leaving specific assets to one child or more than an equal share to one child over another. Or you’ve made provision for a charitable distribution. Why not sit down with the kids and explain the rationale rather than having them wonder, “why’d Momma do that?”

So the next time you have the kids together, you might want to have that talk about what happens to your stuff after you’re gone. It could prevent some hard feelings, surprises, and the risk of losing family assets! And it's perfectly polite to talk about it!

Originally published via Magnolia Reporter.