Most Family Beneficiaries Hush-Hush About Inheritance Plans, Study Says

Most of the people in a position to pass on wealth to the next generation are not being open about their intentions, according to an Ameriprise Financial study released today.

They feel it is none of the heirs’ business or, in some cases, they do not want to deal with the conflicts that could erupt, the Ameriprise “Money & Family” study said.

“This study confirms people’s reluctance to talk about money within the family,” Marcy Keckler, senior vice president for financial advice strategy at Ameriprise Financial, said in an interview. “The role of the financial advisor can be really important in facilitating these family conversations.”

Not sharing information “can lead to rifts in families and conflicts being created at a time when emotions already are running high” because of a death or transfer of wealth, she said.

“Families have interconnected financial lives. It is so important that the generation inheriting know what their commitments and responsibilities will be and know what to expect,” Keckler said. “For instance, they need to know what provisions have been made by the parent generation for their care in later life. It would be nice for the children to know if they are expected to pay for care or if it has been planned for.”

On the other hand, “parents hesitate to talk about finances because they want to make sure they have enough for themselves in retirement and they do not know what they will have left,” she said.

Only one-fourth of respondents who said they have talked to their children about finances said they had introduced the children to their financial advisor. “This is a huge opportunity for financial advisors to make a connection with the next generation and maybe recruit them to be clients,” Keckler said.

According to the study, only 19% of the respondents said they have been completely transparent with their relatives about their finances. The study included 3,325 Americans ages 30 to 70 with $100,000 or more in investable assets.

In addition to saying it is none of their heirs’ business, and the fear of creating arguments, the respondents said they do not want their relatives’ input. Others said they had revealed some, but not all, of their financial lives to the next generation.

While investors may not be fully transparent about their finances, many are passing on how they value money and are trying to impart financial wisdom to their children, the study showed.

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