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Americans have historically been reluctant to discuss financial matters among family members, but a recent study by Fidelity Investments shows that attitudes toward Taboo topics of wealth are moving.
Loyalty Studying the state of wealth mobility They found that 56% of Americans did not talk to their parents about family finances as children. Of that group, 82 percent wish they had because they think receiving financial education at a younger age would be beneficial.
It also found that Americans' attitudes toward those negotiations are changing, with 83 percent of respondents saying it's important to talk about it. money management with children, and 67% of parents currently talk to their children about family finances.
“Money and wealth is one of the topics that we historically don't like to talk about,” David Patterson, head of advanced wealth solutions at Fidelity Investments, told FOX Business. “Wealth is such a deeply personal experience, so in some ways, it's not surprising that people have historically been uncomfortable talking about it.”
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Americans' attitudes toward once-taboo financial conversations are waning, a Fidelity study found. (iStock)
“This study showed that people are starting to break the cycle of avoiding family arguments. And clearly, if we put it to Intergenerational wealth transferIt's kind of a generational difference, Peterson said, and what we've found is that older people in general — they're not as comfortable talking about it.
Peterson said many Americans have experienced the complications that can occur when a parent who wasn't very transparent about their finances begins to decline and family members are forced to step in to take care of their finances.
When people start to reach the end of their lives and suddenly they can't manage their finances or they're no longer able to make decisions about it, that's where you start to see things go a little sideways. Because they have not shared with their families what their wealth is, where the wealth is and what it is made of. “And you can very quickly find yourself in a situation where, at a really emotional time in life, people are now worried about, well, how are we going to manage mum and dad's finances when they can no longer do that? do?”
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Patterson suggested that families look at financial conversations as a process rather than trying to tackle it all at once. (iStock)
She said it's important for families to have documents such as a health or health care power of attorney power of attorney To help guide the health care system, as well as a living will with instructions about the person's hopes around it. Another key document is a financial power of attorney, which authorizes someone to act on their behalf in financial matters.
Patterson said families should also consider other documents and names needed for end-of-life. Brokerage accounts which can be jointly titled with rights of survivors, can be easily transferred to the surviving owner, while beneficiary names can also be included to transfer accounts on death to the beneficiary.
“You need a will that accounts for all the things that don't really have a title to it or a beneficiary named in it,” he added. “And then, in some cases, it might be beneficial to have a trust and put the assets in that trust so they can pass through, similar to a beneficiary named account. Then the trust specifies who gets all those assets. trust.”
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Fidelity's study found that people who have financial plans feel more confident about building and protecting their wealth. (iStock)
To get the ball rolling, Patterson suggested, it can be helpful to do so with the understanding that it's probably not a one-off conversation and more of a process to reduce some of the pressure and emotion surrounding those conversations.
“I think for some people, having a very detailed itinerary of what you're going to talk about works very well; for others, it doesn't, and my advice is not to think that “It's going to be a trip,” Peterson said. It is wrapped in different types. Emotions.”
Sharing some details about financial accounts and points of contact can also be a good first step, he explained, even if it doesn't necessarily lead to full disclosure of the characteristics of an elderly person's assets.
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“Given that older generations are reluctant to disclose necessarily all the details of their assets, what I often recommend is to share at least the amount, not necessarily the amount, but where it is; Who are the key people? In case a family member has to find out more about it, call and keep all of these things in a place where people can easily find them.
“Probably the first step is just doing a really robust inventory of what's there, a balance sheet, a wealth statement, a net worth statement, whatever you want to call it — but that's just a list of things until somebody has to do it. At least they know where to go.” “And so, you kind of have this sensitivity about the amount that's in all these different accounts or Banks or financial institutions“
Regardless of the process families use to create their financial plans, the Fidelity study found that having a plan boosts confidence. While about four in 10 Americans worry about losing their wealth, 78% with a financial plan said they are confident they have taken the right steps to build and protect their wealth, compared with 26% and 27%. of them No program