- When it comes to generational and estate planning conversations, it can be hard for families to know where to start to engage.
- Conversation cues identify family relational and emotional topics that can add layers of complexity to the planning process.
- Conversation cues help you engage in family conversations that enhance planning outcomes while strengthening your relationships.
When it comes to family conversations about generational topics like estate planning, it can be difficult to know exactly how to get the conversation started. This is understandable. These topics are often entwined with emotional and relational dynamics that can feel fairly complex.
Sadly, many families haven't had opportunities to practice talking through these topics and don't have a positive track record of navigating complexity. It often feels easier to stick to conventional patterns of parent-child hierarchy and keep estate-planning conversations and decision-making cloaked in secrecy and silence.
Fortunately, conversation cues can help you not only have these conversations, but do so in a way that strengthens family relationships through time and achieves more successful planning outcomes.
Using conversation cues to simplify complex family topics
Conversation cues offer a different approach to generational planning discussions and decisions. These cues identify specific emotional and relational family topics that may be adding complexity to your planning process. Each cue simplifies complexity by staking out 2 complementary aspects of a topic as a frame for dialogue and co-creation, which helps you explore people's views, test each other's thinking, and establish better decision pathways.
Using a combination of conversation cues, you can encourage engagement by breaking the "one big conversation" into smaller discussions that feel more manageable. In this way, the cues help you achieve a necessary aspect of family conversations around generational planning: keeping the people and the conversation itself at the center of the process. As you do, you can ensure you balance an analytical approach to finances and planning with an empathetic approach to your family's relational dynamics.
Here are 5 conversation cues to help you foster productive discussion and build strong relationships.
1. Closeness – Distance: Be mindful that every financial decision has the power to create closeness or distance in family relationships. We all recognize what closeness and distance feel like. Close family relationships typically involve open conversations: All views are considered, everyone feels respected and cared for, and there is a sense of fairness. Distant family relationships often involve a lack of communication: Some family members may feel they have no voice, are being judged or controlled, and are treated unfairly.
When it comes to financial conversations, decisions, and actions, ask yourself, “Am I creating closeness or distance in my family's relationships?” This applies to discussions about college, career, lifestyle, and elder care, all of which are examples of developmental opportunities where closeness or distance can be created.
Raymond was a devoted family man who could fix anything, and his children grew up counting on that. When Raymond passed away suddenly, his family was heartbroken. And when his will was read, his daughters experienced a sense of abandonment inconsistent with the feelings they had for him. He always put them first. His daughters could not understand the choices he made for his estate plan. The lack of communication and confusion led to family conflict and eventually ended some relationships.
The story of Raymond's family is not unique. He was a loving father, and his family was close. By excluding his children from financial conversations and decisions, Raymond set in motion a series of unintended consequences that were passed down along with his estate. Despite having good intentions, Raymond’s will did not create the closeness his behavior had generated during his life.
Surprises in a will have significant potential to create distance. By involving your family members in financial conversations and the estate-planning process, you can create peership and closeness during your life that carry on across generations.
2. Voice – Vote: Giving a voice and input to others does not mean giving up the vote and final decision on outcomes.
When it comes to navigating money, wealth, and estate planning, it can be difficult for families to determine who should have a voice and who should have a vote, and the default parental practice is generally to keep both.
When Dexter found out his parents appointed him the trustee for his special-needs brother, he understood his obligation but wished he had been given a voice—and maybe even a vote—in the decision.
When Olivia was told how much money she was allowed to spend on her wedding, she felt she should have had a voice. When she was given a prenuptial agreement by her father's attorney, she was confused about who should have voice and vote.
When Arthur learned his parents had created generation-skipping trusts for Arthur’s children—and his oldest son would have access to the money this year—Arthur and his wife felt they lost their voice and vote in a decision that directly affected their own children. But as the legal "grantor" of a generous gift, Arthur’s father insisted they did not need a voice and did not get a vote.
At every developmental stage, parents may fear giving children voice or sharing vote because they assume it means giving up degrees of control. But as children’s roles in the family evolve through time, the Voice-Vote engagement should also evolve.
Giving voice in the money, wealth, and estate-planning arena is an important way for you to cultivate peership in your family relationships and step out of traditional parent-child hierarchies. As your children marry and form their own families, and as you age and consider next-generation planning, shared reflections on Voice-Vote dynamics will help you build mature family relationships and facilitate the transition of your decision-making processes.
3. Fair – Equal: Making money, wealth, and estate-planning decisions equal does not necessarily make them fair. Siblings do not always have the same lifestyle, capabilities, career choices, health, maturity, marriages, number of children, or life spans. And parents' circumstances and beliefs can change over time. Yet, the more differences there are within a family, the more often parents tend to default to "fair IS equal."
When Luis’s mother sought his approval of her financial support for his brother, which she was not providing for Luis, he did not know how to respond. That turned out to be a good thing, because it gave them an opportunity to hear each other’s thinking and talk through the family's circumstances.
Luis’s mother acknowledged that she had played a role in his brother’s financial dependence on her. She expressed her wish to help the brother bring his financial circumstances more in line with Luis’s. She also shared her hope to work with an advisor to help set future boundaries for the brother. They also discussed the needs of Luis’s own family and what he could expect in the future in terms of wealth transitions.
This scenario illustrates the importance of talking through what is considered fair, because fairness is a matter of personal interpretation. It’s also important to discuss the criteria for measuring fairness: Is it based on need, merit, bringing siblings’ circumstances in line, or trying to treat everyone equally?
Both the process and ultimate decision will impact perceptions of fairness. As a result, avoid declaring what is fair. Involve your children in the conversation and decision-making process so everyone can participate in developing a shared understanding of what is fair.
4. Transparency – Disclosure: One of the most common money, wealth, and estate-planning questions is “When is it appropriate to talk about money or disclose wealth and estate plans to children?” But that is only part of the question you should be asking. It’s equally important to explore how you can create an appropriate level of transparency at each stage of life.
Disclosures about wealth and estate plans are often prompted by late-in-life angst, illness, or death. If you delay sharing decisions until they are set in stone, you ensure your children will feel their input has no bearing on the outcome.
Balancing transparency and disclosure encourages you to have developmentally appropriate money, wealth, and estate-planning conversations with your children. This creates a sense of shared knowledge and decision-making through time, while still allowing you to hold back certain information until you are comfortable sharing it.
Suyin and Chen both came from families that never discussed money, and late-in-life disclosures influenced their personal finances and family relationships. Late in their lives, Suyin discovered she was to be the sole caretaker and financial decision-maker for her parents, which left her with added stress that her siblings were spared. The decision also created secrecy and jealousy among Suyin and her siblings because she held the financial reins and they felt excluded.
Suyin and Chen were determined not to repeat those outcomes with their own family. They agreed on 2 points. First, they would never refuse to answer financial questions when asked by their children. Second, they would have regular family meetings around key life events such as graduations, college choices, vacations, buying homes, having children, and longer-term financial planning.
Suyin and Chen’s parenting reflects the spirit of this rule. They did not feel the need to reveal their entire balance sheet or all their future plans, yet their commitment to age-appropriate transparency helped them avoid secrecy and one-time disclosures of decisions made long beforehand.
This frame can help you lay the foundation for setting boundaries around transparency, testing your own thinking, and uncovering potential unintended consequences of your future plans.
5. Wish – Fear: Conversations and decisions surrounding money, wealth, and estate planning are often laden with wishes and fears. We wish for our children to have an easier life than we did, but we fear that any assistance or knowledge of family wealth will destroy their motivation. We wish for our children to have passionate and fulfilling lives, but fear they will choose careers that cannot support the lifestyle we want for them. We wish our parents would be more forthcoming with their retirement and end-of-life plans, but we fear any conversation about the subject.
Wishes and fears are often in tension throughout life. Wishes are aspirational and intimate. They tap into our deepest desires. Wishes are different from goals, which are often measured and based on what is realistic. As the flip side of wishes, fears are reactive and defensive, close our field of vision, and limit the range of action. Most importantly, fears are often self-fulfilling and can erode the quality of family relationships and communications. Unfortunately, financial decisions made on behalf of future generations tend to be motivated primarily by avoiding what we fear, rather than pursuing what we wish.
Robert feared his musician son Charles wouldn't be able to make a living. This fear caused Robert to characterize Charles as incompetent and berate him about financial responsibility. Because his father made him afraid to follow his wishes, Charles reacted rashly in ways that only furthered his father's opinion of him as financially incompetent.
When Oscar’s uncle received his inheritance, he quit his job and never worked again, and his children followed in their father's footsteps. Oscar fears that money will likewise demotivate his own children. To “protect” his family, Oscar lives like a miser, never discusses his personal wealth, refuses to help his children financially in any way, and is considering giving all his money to charity.
It is important to ask yourself “What are my fears?” and “What are my wishes?” to uncover the true motivation behind your behaviors and decisions. Living like Robert or Oscar is a missed opportunity for your family to share in your wishes about the future. Fears also erode the quality of family relationships and communications.
Simply avoiding negative outcomes does not ensure positive ones. When it comes to money, wealth, and estate planning, recognizing your fears will enable you to prevent them from driving your decisions and plans for the future so your wishes can play more of a role.
About the author
Dr. Timothy Habbershon is a managing director of Fidelity Investments. He founded and leads the Fidelity Center for Family Engagement (FCFE), which helps advisors and families build capabilities for how they engage around money, wealth, and estate planning decisions. For more than 25 years, Dr. Habbershon has been an advisor, consultant, and coach to large family-controlled firms and family offices worldwide. He is an Adjunct Professor at Babson College outside Boston. The opinions expressed are those of the author and do not necessarily reflect those of Fidelity Investments.