Family Values: Communication and planning in financial legacy building

Conversations about money aren’t easy for a lot of families. Family dynamics can be complicated, and money is a tough topic as many of us are taught from a young age not to discuss it. At Sea Glass Wealth we’re changing that and encouraging open communication around finances across generations within family units. These conversations are fundamental to building financial strength and avoiding future family conflict. We have seen the transformative power of transparent intergenerational discussions about money. Open communication is a huge factor in planning the future of your wealth and financial security of your family. Having honest conversations within your family about your money, how much you have and how you’d like to spend it during your lifetime and afterwards, gets everyone on the same page and avoids potentially costly complications. Proactive communication and planning will avoid confusion and emotional distress in unexpected situations.

Beginning money conversations early, when your children are young, sets the tone that these conversations are healthy and welcome. It’s never too early to discuss money management in an age-appropriate way. The ‘Sandwich Generation’, those caring for young children as well as their own ageing parents should have these conversations in both directions. Discussing wishes for end-of-life care, funeral arrangements, and management of other life events is just as important as planning children’s education funds, travel and investments.

Here are some benefits of having open conversations around money and financial planning, which, we’ve really found, are conversations about life.

Sharing Goals and Values: When families openly discuss their financial aspirations and realities, it creates a deeper understanding of each person's goals and values. Whether it's saving for education, retirement, or a dream vacation, aligning these objectives builds shared purpose and understanding. Having open, honest discussions about how you’d like to save and spend your money seeds conversations around values and purpose. Sharing the vision for your life can involve setting short and long-term goals. Understanding the values of each family member helps acknowledge their earning, spending and vision for their life. This understanding sets the groundwork for the planning that will point each family member in the direction they want to go.

Mitigating Conflict: Money-related conflicts can strain families and relationships. Proactive communication acts as a buffer against misunderstandings, resentment and confusion. When families discuss financial priorities, concerns, and challenges early and openly, it fosters understanding and cooperation. Discussing financial values and intentions proactively allows families to address issues collaboratively, strengthening mutual understanding and shared values and resolving conflicts constructively. Having honest intergenerational conversations sets your family up so that if something unexpected happens, you’re on the same page and there are no surprises. Engaging a professional to assist with facilitating these conversations can be valuable so wishes are documented by an unbiased third party and held in a neutral location.

Financial Education: Understanding finances can start at any age and an open dialogue provides a platform for ongoing financial education. Parents can share lessons and advice around budgeting, investing, and debt management, empowering younger generations with essential financial literacy skills. Investigating financial issues around savings and investments can align values as families plan for their futures together and independently. Understanding tax implications of gifting and tax-efficient ways to transfer wealth to children can save a lot of money when proactively addressed. By understanding and discussing financial concepts and encouraging questions, families gain the knowledge to make informed decisions throughout their lives. Starting these conversations early, around earning, investing and saving, allows parents to instil financial values in their children, laying the groundwork for responsible money management habits and comfort around discussing money.

Building Trust: Transparent communication builds trust within families. When parents involve children in financial discussions, it allows them to share their values and fosters a sense of responsibility. Spouses who openly communicate about financial matters demonstrate mutual respect and trust, enhancing the foundation of their relationship. Financial trust and understanding should be built with ageing parents as well as children. This conversation can also involve extended family and close friends. Trusting several people with information around not only financial wishes but where these intentions are documented can avoid confusion in the event of unplanned events. Communicating openly around financial matters will inevitably build trust and comfort around discussing financial matters.

Writing it Down: Having conversations around financial values and planning is important. But equally as important is ensuring these wishes and plans are documented and saved somewhere accessible. In the event a person is no longer able to communicate their wishes, having paperwork that allows family members access to the information avoids conflict, confusion and wasted time. Digital assets are becoming an important part of this conversation. Passwords to social media accounts and storage of digital assets hold value as does property and investments. Financial subscriptions have passwords and require management. Digital vaults can be useful for storing and allowing access to valuable documentation.  The Sea Glass team uses a platform called Side Drawer with their clients to assist in this regard.

Preventing Financial Crises: Hidden financial issues can escalate into crises if left unaddressed. By creating a family culture of honest conversation, families can identify potential challenges early on and develop proactive strategies to mitigate risks. Understanding the financial position of family members can offer comfort or initiate buffers. Whether it's creating an emergency fund or seeking professional guidance, open communication enables families to navigate and plan for unforeseen circumstances with resilience and contingency. If family members, especially heirs, are aware of wishes and financial plans, it can avoid legal issues and often saves legal fees. Understanding your family’s financial position and wishes also saves time and emotional burden in the event of a passing. 

Preparing for Detours: Financial setbacks are a reality for many families. Those who communicate openly are better equipped to manage life’s detours together. Clear communication creates a culture of resilience and adaptability. Transparency and planning allow families to overcome challenges and face unexpected events with cohesion and confidence. Having regular conversations about finances strengthens the resilience of an intergenerational family unit.

Legacy Planning: Discussing financial matters openly facilitates legacy planning and tough conversations around death and inheritance. From wills and estate planning to charitable giving, these discussions ensure that family members' wishes around education, housing, and inheritance are understood and honoured by everyone affected. By involving all stakeholders in the decision-making process, families can create a comprehensive legacy plan that reflects their values. Inheritance can be a contentious issue for some families so having an understanding as well as updated documentation eases tensions upon the passing of a family member.

Communicating Values Builds Legacy

Open and regular communication around money is not just a financial strategy; it's a building block of trust and shared values. Discussing goals and the means needed to achieve them allows for connection, dreaming and planning. Through transparent discussions, families enhance their financial education, avoid conflicts, build trust, prevent crises, facilitate legacy planning, and strengthen resilience. 

At Sea Glass Wealth we often facilitate these conversations with families who aren’t used to having them. We bring an unbiased, external perspective offering holistic, expert advice, rooted in our experience. We can guide intergenerational family conversations which often end up being productive and even a bit of fun as family members learn about one another’s goals and plans to fund their endeavours. These conversations begin about money but evolve into discussion about life. We know that when a family collaborates, they’re individually and collectively better off. 

Leaving a legacy of good communication is the best inheritance.

Get in touch with us and learn more about how we can help your family begin these discussions. https://seaglasswealth.com/contact/