Advisor Intelligence

Families Avoiding the Tough Conversations

Parents don’t want their children counting on future inheritances, while children don’t want to upset their parents by talking about their estate planning. The result? One in three parents haven't had detailed conversations with their adult children about their future plans.

Fidelity’s 2014 Intra-Family Generational Finance Study found that 10 percent of parents haven’t talked to their children about their wills and estate planning, while 31 percent have only had vague conversations.

Moreover, more than 40 percent of the 159 parents surveyed said they also haven’t had detailed discussions with their adult children around their living expenses in retirement or healthcare expenses.

Why? A majority of parents (30 percent) say they don’t want to talk about personal finances with their children because they don’t want to build expectations around inheritances. On the flip side, one in four adult children say they avoid these topics because they believe it’s upsetting to both parties.

But not discussing these topics can create major misconceptions, the study found. On average, adult children underestimate the value of their parents’ estate by nearly $300,000. And while 43 percent of adult children say they or a sibling plan to take care of their parents if they fall ill, only 6 percent of parents believe they will rely on their children.

And despite the belief that these conversations will be upsetting, those who have had detailed discussions around estate planning actually feel more at ease and more prepared—93 percent of parents say it brought them greater peace of mind.

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Diana Britton is the Managing Editor of WealthManagement.com and REP. Magazine, covering asset management and independent broker/dealers from all angles. A native of Los Angeles, she now lives in...

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Megan Leonhardt is the associate editor at WealthManagement.com, covering all of the wirehouse news, as well as regulatory affairs. A business journalist with a background in the legal industry,...
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