By Cheryl Winokur Munk
Posted in The Wall Street Journal on February 11, 2018:
Many wealthy families face a tricky balancing act. On the one hand, they want to conceal important details even from adult children for fear of creating a sense of entitlement. But when parents are too secretive, it can make it much more difficult for the children when they eventually inherit those investments.
“The more secretive you are, the harder it becomes to talk about later on,” says Michelle Brownstein, a certified financial planner and director of private client services at Personal Capital in San Carlos, Calif.
Discussions about family money are especially important these days given that financial professionals estimate that tens of trillions of dollars in financial and nonfinancial assets will be passed from baby boomers to their heirs over the next several decades. How much to disclose – and when – will depend on each family’s dynamics and wealth situation. But, generally, financial pros say that discussions with children around family wealth should take place in stages, over a number of years.
“A lot of times, there’s a myth that talking about money means revealing the balance sheet,” says Stacy Allred, managing director and head of Merrill Lynch’s Ultra High Net Worth Strategic Wealth Advisory Group and Center for Family Wealth Dynamics and Governance. “Instead, it’s the series of conversations and typically the very last thing that’s shared is the distribution of the estate plan.”
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