Estimate Time12 min

When someday is today

Key takeaways

  • Financial disclosures to children can impact the course of your future relationships.
  • Make disclosures a peership moment to step out of parent-child mode.
  • Be careful that your own history and fears don’t dictate the tone of a disclosure.
  • Use this conversation to launch continuing, age-appropriate transparency.
  • Trust the process—we never know how the future may unfold.

You knew this day was coming. You’ve known since you started setting money aside in your child’s name. But that doesn’t mean you feel ready to talk about your wealth—or is it their wealth? It’s funny how quickly someday becomes today.

Like the “sex talk” or discussing end-of-life care, talking about an UTMA (Uniform Transfers to Minors Act account, or any account or trust to be transferred to your child at a predetermined age) is one of “those” conversations—the kind parents find hard to initiate and challenging to navigate. It’s understandable that you might find yourself putting it off until circumstances force you into it.

These “life talks” are an inflection point in your relationship—the beginning of a significant change. In this case, talking to your adult child about their access to money could open the door to a lifelong conversation about wealth, lifestyle, choices, and decisions. It can also launch your relationship into a new stage of peership and intimacy.

As you prepare, it’s useful to remember that the way you frame the conversation will have a significant impact—today and in the future—on how you and your child interact around money, wealth, and estate planning.

Here are 6 conversational frames, viewed through real-life scenarios, that can help you navigate a current wealth disclosure while laying a solid foundation for the challenging conversations life will require of you in the future.

1. Wish-Fear

Conversations and decisions surrounding money, wealth, and estate planning are laden with wishes and fears. Wishes are aspirational and intimate. They are the inspiration behind our goals. Fears are emotional and range from unpleasant feelings to deep-seated anxiety. They are often tied to perceived risks and threats.

Most often, when a disclosure is put off until circumstances necessitate action, it’s because of deep fears. Consequently, when the conversation finally happens, those fears may end up having an undue influence.

A widower named Stephen worries that his only child Catherine is still “finding herself” at 25. He is fearful that the $1 million UTMA account will artificially support a lifestyle in New York City that her current career choices cannot support. Catherine was also recently married to Joshua, whose values around spending and money are concerning to Stephen.

The challenge Stephen faces is ensuring that his fears don’t derail the upcoming UTMA conversation. He established the account based on his hopeful wishes for Catherine’s future, and she is filled with wishes of her own. How should he proceed? Start with the wish.

Stephen can get to the wish by asking curious open-ended questions. He could begin by saying, “I’m excited about the opportunities this money can create for you. What wishes might it help you fulfill?” He could follow up by asking, “What is your wish for your career? What are your wishes for your marriage? What is the lifestyle that you want?” Stephen can share his wishes for the account, their future conversations, and their relationship.

Stephen can also strive to stay with wishing for a while before getting into fears or functional details. And he needs to remember a guiding principle: Never judge a wish, just listen.

When Stephen does express his fears, he needs to own them and be careful not to project them onto Catherine. The skill of "process out loud"—saying what you are thinking and feeling in a way that others can hear—can help set up a deeper conversation.

It sounds like this: “Catherine, I love hearing your wishes about the future. Can I express some fears I have? I wouldn’t want this money to enable a lifestyle far above what your own income can support. And I don’t know enough about Joshua to know how he will view or use the money. Can we talk about this?”

2. Reactive-Proactive

There is an irony inherent to disclosure conversations. When parents set aside money for their children, it is an inherently proactive decision. Yet the emotions that arise around a disclosure tend to trigger a series of in-the-moment reactive behaviors.

Catherine was a “compliant” child growing up, so Susan and John were caught off guard and reactive when she asserted a desire to take responsibility for her $150,000 UTMA account. Voices were raised, John was highly resistant, and Susan tried to mollify the situation. It ended in a classic standoff where no one was sure how to move forward.

Reactivity is like a check engine light in a car. It indicates something is going on inside you that needs to be explored. In a conversation, it looks like an outsized emotional reaction that shuts things down, constrains choices, and locks people into reactive roles. Conversely, a proactive mindset focuses on identifying future opportunities and reflecting on them. While reactivity limits options, proactivity intentionally expands them.

Had Susan and John been more reflective, they could have explored Catherine’s thinking and discovered that she wants full responsibility so she can learn about investing. They could have used a proactive option like the “What if…?” skill, which sounds like this: “What if we started investing together? What would that feel like?” Or, “What if we set you up to work with our advisor? Would that feel empowering?”

3. Control-Influence

Planning and parenting both involve control and hierarchy. They focus on sentiments like “Who is in charge?,” “Whose money is it?,” and “I know what is best.”

Successfully navigating a financial disclosure relies on stepping out of parent-child hierarchies by moving from control to influence in your relationships. Peership, which is the developmental goal of families, is a relationship with your child where they feel valued as an equal participant with a unique perspective.

Sam was determined to ensure his children were not “ruined” by wealth. He controlled their access to money, regulated their spending, and was vocal about the values they should have. As the children tried to forge their own path, they were seen as rebellious and nonconforming, which Sam interpreted as evidence that they should not have access to the money he put aside for them.

Through time, Sam’s approach had significant consequences for his family. The children are now in their late 30s and 40s and have successfully made their own way in the world. Sadly, because of Sam’s views and approach, he has no connection with his children or influence on their lives and families. All he has left is his control over the money.

Yet even now, Sam has choices. For example, he could expand to a developmental, influence-based mental model. He could think, “My children are adults with families of their own, and I want my wealth to be part of their lives and planning for the future.”

This mental model would set Sam’s family up for co-creation, which is a test-and-learn skill that surfaces and empowers other people’s views, voice, and vision. When parents view their children as peers, they can co-create and ensure planning outcomes fit with their lives.

4. Transparency-Disclosure

This life talk may be a moment of disclosure, but it allows you to begin moving toward life-long transparency—age-appropriate information sharing with your child at each life stage.

This is achieved by expanding your mental model from asking, “At what age is it appropriate to talk with my child about wealth?” to “How can we establish an ongoing dialogue about money, wealth, and estate planning?” It’s a shift from a focus on disclosures to an emphasis on a developmental process.

Kim wasn’t surprised there was an UTMA account in her name because she had been told it was established. However, she was a little surprised to find out it was worth more than $2 million. Kim’s parents had been fairly open about their wealth, but she hadn’t expected to have access to so much money so soon.

As a result of her parents’ commitment to transparency, the disclosure conversation about the UTMA easily shifted from talking about what Kim would do with the money to the fact that she did not want full responsibility for the account at age 24. She knew it was there and could ask for it at any time. But she wanted to finish graduate school, which her parents were paying for, and revisit the money in the future when she was thinking about starting a career and family.

Kim’s parents’ openness and transparency around wealth and lifestyle enabled Kim to make sense of her emerging financial situation. When she learned about the money that had been set aside in her name, she was able to participate thoughtfully in the conversation and help set a course of action that suited her current and future situation.

There is enormous benefit to normalizing conversations around topics like lifestyle choices, wealth and planning, health, and end-of-life care. Doing so keeps difficult subjects from becoming secretive, going underground, or getting addressed in charged late-in-life disclosures or hard conversations.

5. Tease out-Bracket off

"Tease out and bracket off" is a key skill for simplifying complex conversations. It operates as it sounds. You tease out the different parts of a topic, decide which ones you want to address now, and bracket off the rest for another time.

This skill is valuable for financial disclosures because it can offset a common side effect of complexity. When faced with a potentially scary subject, it’s common to load all of your concerns and fears into a single conversation. That can then lead to more complexity, which in turn generates more emotional energy, which isn’t a good recipe for a productive inflection-point conversation.

Listen to the complexity in the following family scenario. Philip and Sarah want to disclose a $1 million trust to their 29-year-old son, Robert. They feel stressed and guilty that they didn’t give it to him at the appointed age of 25. They have never had a conversation with him about wealth, their fears, or his lifestyle and wishes.

Recently, since Robert announced he was getting engaged, Philip and Sarah are feeling a strong need to protect the money in the trust. And what about a prenuptial agreement? They’ve never discussed it with Robert, don’t know his fiancée Joanna very well, and don’t feel ready to disclose their planning to the young couple.

Most of all, Philip and Sarah don’t want Robert’s younger twin siblings to know about their own trusts, especially Liza, who has been somewhat “troubled.”

By putting off the conversation with Robert, Philip and Sarah have inadvertently created a lot of emotional energy and resistors in their family system. There are now so many complexities and emotional undercurrents that trying to tackle even a few of them at once—let alone all of them—is bound to lead to conflict and confusion.

This is a situation where "tease out and bracket off" can help. While the parts are all connected, they can be dealt with through a series of conversations and co-creation sessions. By applying this skill, Philip and Sarah can set themselves and Robert up to proceed calmly and collaboratively.

To frame the conversation and begin to organize the topics, the family can use the "process out loud" skill. It sounds like this: “Robert, we have a lot we need to talk about at this stage of life. We would love to create an agenda of topics with you and decide the sequence of conversations, including when we will involve your fiancée Joanna.”

When you apply "tease out and bracket off" to a disclosure conversation, you will feel the emotional energy subside. Then you can move ahead in a way that allows everyone to play a more equal, less impassioned part in the process.

6. Closeness-Distance

As the scenarios outlined above illustrate, surprise disclosures have the potential to define the course of your future relationship with your child. By definition, they will either create closeness or distance. They are seldom neutral.

We all wish for and know what closeness feels like: intimacy, communication, trust, transparency, safety, and openness. As you plan for the disclosure conversation, be intentional about embodying the traits of closeness. Make it an intimate, relational experience. Communicate, tell stories, be curious, and ask questions. Be as transparent as possible. Make the conversation feel safe and inviting to your child. Be open to their options, views, and feelings. And, most of all, practice peership. Even if your child is a young adult, they are an adult.

We also know what distance looks like and feels like: hierarchical control, distrust, put-downs, reactivity, anger, shut-down, lack of transparency, and cut-off. What would that look like? You may lean too heavily on parental control. You might convey that you don’t fully trust your child and how they make choices. You may have negative attributions that come out as put-downs. You might get hooked by reactivity and anger. You may shut down when your child asks a question or shares a view. You may offer limited transparency. Or the conversations might end with a classic “my way or the highway” moment of cut-off.

The point is, be intentional about creating closeness. Otherwise, your individual histories, fears, and disappointments may lead to the unintended consequence of a distancing disclosure experience.

Trust the process

The self-coaching phrase “trust the process” is a reminder that you can’t know what the future will look like. It’s also an important reminder for parents who are in the process of watching their children grow into adults.

Few of us could have accurately predicted exactly how we would turn out. In fact, many of us surprised ourselves, our teachers, and our parents along the way.

Use these 6 conversational frames to set in motion a process full of trust and continuing communication. They have the power to turn a disclosure you may have been putting off into a moment of peership, closeness, and connection with your child.

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The scenarios in this article are based on real family experiences. The names and key details have been changed to ensure anonymity and confidentiality. Services from the Fidelity Center for Family Engagement are currently available on a limited basis. The Fidelity Center for Family Engagement is an affiliated business unit of FMR, LLC and operates externally from Fidelity Brokerage Services LLC. The Fidelity Center for Family Engagement (FCFE) puts the family-advisor partnership at the heart of a family’s generational wealth experience. Our passion is to see advisors connect with clients and their family members to build an all-of-life partnership that has the relationship capital to span generations. The FCFE uses a mindset and skillset approach to develop new family-advisor partnership capabilities. They provide programs, tools, and resources that help advisor teams communicate to connect more deeply, build a relationship-based practice, and navigate generational relationships and transitions.

Investing involves risk, including risk of loss.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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