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How to talk to your family about your estate plan

Why meaningful discussions can help build trust.

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One of the potential benefits of wealth planning is the opportunity for families to have meaningful conversations about their hopes, dreams, legacy wishes, and more. These types of planning discussions can not only help to create family intimacy, but may also help build relationship capital for the future.

In my first Viewpoints article, If money talks, so should you, I defined relationship capital as “the relational reserve of goodwill that allows families to talk about anything,” and I gave four guiding principles for building it. In this article, I outline what I consider the three outcomes that we strive for in order to have effective family communication—and how these goals can help lay the foundation for sensitive and complex estate planning decisions.

Defining your goals

Most people assume that the goal of effective communication is mutual agreement. This can be a dangerous assumption, particularly when it comes to estate planning. Here’s why.

When agreement is the goal, people often fight for their view, and try to force others to agree with them. Entering a complex, emotionally charged conversation with this mindset is always counterproductive.

Seeking agreement can also get confused with needing consensus before a decision is made. Consensus seeking can constrain decision making, and let one or a few people hold the process hostage by saying "I’m not proceeding unless everyone agrees."

Sometimes, the mere fear of not getting agreement can keep people from entering into difficult conversations. Some people may be conflict-averse and equate disagreement with conflict. Others may never have had the experience of having effective conversations that include disagreement, or of ending without full agreement.

While you don’t need to have agreement as the frame for effective conversation, you do need to have decision-making clarity. In other words, who has the power and the right to make the final decision, and how will it be made?

For example, if assets under discussion are owned by a senior generation member, a healthy conversation doesn’t mean successors have a vote, but I believe they should at least have a voice.

So, if vote and agreement are not the outcome goals, what are? Why even give people a voice in the process? The overarching answer is to remember that we are building relationship capital within the family, and not just doing estate and wealth planning. With that point in mind, here are three goals I would encourage people to strive for in their conversations.

Goal 1: Understanding

How many conversations have you ended by saying, “You just don’t understand”? Or, how often have you stopped trying to talk to someone because they only voice their opinions and make no attempt to understand yours? We all know the feeling of someone coming across as uninterested, disengaged, arrogant, indifferent, or controlling, simply because they don’t try to understand our point of view.

Understanding is the intellectual dimension of a conversation and is essential for gaining both insight and engagement from others. In a research study I conducted several years ago, participants who felt that the group at large tried to understand their views reported higher levels of trust, satisfaction, and enlistment in the outcome—even when the decision did not go their way. Without understanding a person’s point of view, we can make assumptions, which may lead us to miss the particular planning point under discussion.

Let’s look at a hypothetical scenario. “Bruce” made a wrong assumption when discussing his stepchildren’s inheritance with his biological children. At one point during the meeting, his biological children made a statement that the way he was treating them in relation to the stepchildren wasn’t fair. Without understanding what his children meant by “fair,” he immediately reacted in anger. The only point they were making was that he was trying hard to treat them all as equals, rather than dealing with each of them as individuals—regardless of whether they were a child or a stepchild.

Goal 2: Congruence

Congruence is the emotional dimension of a conversation, which focuses on each person’s feelings. It should be recognized that effective communication is not emotionless.

Many people believe that conversations are safer without emotions because an individual’s feelings are often expressed in destructive ways. Behavior such as anger or shouting can create distance, not congruence. Even if shouting is an “acceptable” family pattern, it can still create distance. This is because those who are being shouted at are forced to “get over it” in order to get back into equilibrium.

In order to create congruence, emotions have to be expressed in a way by which they can be heard. We are emotional creatures, and unless we intentionally and effectively share feelings during a conversation, those feelings go underground, fester, and often come out at inopportune times—perhaps right when you have to discuss a difficult wealth transference issue.

Let’s look at an example. When a father and daughter started pounding their fists on the table and shouting during one of our planning meetings, it actually had nothing to do with the topic at hand. In reality, “Sandy” was feeling judged and unsupported by her father, “David,” and “David” was feeling very let down by “Sandy.” Had they talked about these feelings prior to or as part of the larger conversation, it is my belief the derailing explosion would not have occurred.

The goal here is to develop skills that help you express feelings in a way that is healthy, can be heard, and creates congruence between what you are saying and feeling and consequently what listeners are experiencing. Without this congruence, passive-aggressive actions may be inserted into the conversation, which benefits no one.

Goal 3: Mutuality

I believe conversations that build relationship capital must give people a sense of mutuality. This dimension requires a level of “peership” between people in the conversation. Peership is a concept that conveys respect, engagement, and belongingness, and cuts across people’s position, power, intellect, or moral authority in a conversation.

For example, during a recent planning conversation I led, “Bill” tried to end an uncomfortable conversation with his children by saying, “It is my money and I will do what I want. You kids should be grateful you are getting anything.” Need I say that there wasn’t much mutuality or peership in that statement? Bill was feeling threatened by the views of his adult children and he reverted to a strong parent-child mode of communication. It shut down the conversation, and destroyed any hope of creating intimacy or building relationship capital from the process.

Peership, however, does not mean that everyone in the conversation is equal in terms of input or decision making. It does mean that people leave the conversation (no matter what their age, knowledge level, gender, role, or decision authority) feeling as if they had an appropriate voice, felt part of the group, and were considered in the outcome. In other words, the goal is to have everyone involved leave the conversation with a feeling of mutuality.

By making understanding, congruence, and mutuality the outcome goals of family communication, it is possible to build relationship capital as well as achieve your estate planning goals.

Next steps

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The information presented above reflects the opinions of Tim Habbershon, Adviser, Family Office Services, as of March 12, 2012. These opinions do not necessarily represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any time based on market or other conditions. Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
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