I’ve always given my 4 children some kind of financial support. Whether it was paying for college, taking a semester abroad, buying a car, or saving for their first house, giving of some kind has been part of our family experience.
My motivation has been simple: I want to help. And it’s a recognition that I feel fortunate to be able to help. Growing up the son of a truck driver, my parents did not have the means or opportunity to offer additional support to my siblings and me.
Until recently, I didn’t view financial giving as a form of planning. My wife, Allison, and I just gave what we could when we could. But since we started having more intentional conversations about our later-in-life planning, we have approached our family giving more intentionally. We now mostly view our gifting and helping as a series of “today” conversations and decisions that are also part of our “someday” planning.
Here are 5 conversation frames for thinking and talking about your approach to family giving.
1. Align as a couple on your approach to gifting and helping
It is easy for couples to develop different views and feelings around giving financial support to their children. It just happens over time. We make one-off decisions on everything from allowances, summer jobs, and weddings to “getting started” money or helping with life transitions. Through time, we settle into a set of “practices” without a lot of intentional conversations. And when we move to more formal planning and giving, there can be a lack of alignment around our decisions.
Here are 4 questions to help you align as a couple around gifting and helping:
- “What stories and experiences have shaped our views on gifting and helping?”
- “What is our wish for supporting our children financially today versus someday?”
- “What fears and concerns do we have around wealth and sharing with our family?”
- “What guiding principles can our family align around for our gifting and helping?”
2. Shift your tax planning to family giving conversations
Giving gifts to our children and to charitable causes can be a core part of our tax and estate planning. It is a win-win if we can reduce the size of our estate while meeting the needs and interests of family members. But it is easy to focus only on tax planning strategies and step over the relationship part of our giving. Talking to family members about our giving clarifies our intentions and makes it about the relationships, not just our financial strategy.
Here are 4 strategy conversations you can have with your children:
- Annual financial gifts: What should people plan on receiving?
- Grandchildren’s education: What are the family’s views on helping with education?
- Retirement savings: What is the best way to help our children save for the future?
- Future trusts and inheritance: What level of transparency is useful for all family members?
3. Talk with your children (and their spouses or partners) about your “right” to give
Do you have the “right” to give anything you want to your children and their families? Asking this question may feel a bit odd or counterintuitive. After all, we are giving someone a gift. But the question reminds us that our adult children have lives and views that may not match our planning interests. And if they have a spouse or partner, asking about giving honors their financial relationship and invites a conversation about how you can plan together.
Here are 4 conversation starters to explore the views of your children around your giving:
- “We don’t want to overreach or assume you want us involved in your financial lives. But we are doing some estate planning and would like to share what we are thinking.”
- “We feel good about our later-in-life financial situation and want to give to the family today. We would love to talk about your life-stage needs and how we might help financially.”
- “We are thinking about annual gifting as part of our financial planning. We would love to talk to you (and your spouse/partner) about what ‘gifting’ means to you.”
- “We are curious about your views on our giving to the grandchildren in our estate. Can we talk about your thinking on their education or other ways we might create opportunities for their future?”
4. Ask about needs and wishes before you give
At the simplest level, asking “How can we help?” or “How would you like us to gift?” moves our giving into the relationship space. This invitation to talk acknowledges that when we are impacting someone with our planning decisions, they should have a voice in the process. And adding their voice means we can plan with their needs and wishes in mind and build intimacy by co-creating how we share information and wealth.
Here are 4 guiding principles for engaging family members around your giving:
- When you are impacting a person with a decision, you should minimally offer them a voice and maybe a vote.
- Clarify what you are planning to give “today” and what you intend to give “someday” so family members can plan around this information.
- Ask about your family’s needs and wishes so you don’t assume your planning interests are what’s best for them.
- Talk about the blessings and opportunities of sharing family wealth as a way to create generational closeness in the family.
5. Be transparent about how giving ties to your planning
When you don’t share information people need to make decisions, they can experience wondering anxiety about the future. Adult children often wonder about things like annual cash gifts, contributions to educational accounts for grandchildren, or future inheritance. Providing some level of transparency about how your giving fits into your overall planning helps everyone make sense of your “today” and “someday” giving intentions.
Here are 4 questions you can ask family members to create greater transparency around your giving:
- “What would bring you more peace of mind around our planning and giving?”
- “What are your fears or concerns about our planning and giving?”
- “What questions do you have about our overall financial situation?”
- “Where might it be helpful for us to plan together, so you have more clarity about the future?”
Gifting and helping conversations can create closeness
Research from the Later-in-Life Conversations Study discovered that families who co-create planning have more confidence their plans will be carried out seamlessly and will create closeness in their family.1 The study also discovered the opposite—that those who have a “When I decide” view of talking about planning decisions have less confidence and feel less close through time.2
Using gifting and helping as an opportunity to co-create is a great strategy for not only building a legacy of sharing, but for more intentionally creating generational closeness in the family.
