According to an Edward Jones report, 48% of Americans plan to leave an inheritance, but over a third intend to refrain from discussing what they’re leaving behind. Edward Jones Head of Wealth Management Advice and Solutions Lena Haas joins Yahoo Finance Wealth! to discuss the stigma surrounding the Great Wealth Transfer.
Haas notes that around $85 trillion will be passed down between now and 2045. She acknowledges that wealth conversations are “an inherently emotional topic” due to negative associations, such as the potential impact on family relationships and the topic of death. Haas emphasizes that it is “critical” to change the narrative surrounding these conversations.
When planning for wealth transfer, Haas stresses the importance of individuals having a transparent conversation with family members. She suggests creating a neutral setting, developing an agenda, and potentially bringing in trusted family members or financial professionals to help explain the situation.
Haas notes that the wealth transfer process goes beyond just “dollars and cents,” as it bleeds into family values and legacies. Families should discuss what they want to be known for, Haas concludes.
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Editor’s note: This article was written by Angel Smith
Video Transcript
RACHELLE AKUFFO: Well, thinking about your future finances, we’re setting you up for success. You can’t take the money to the grave, so where is your money going once you’re gone? Well, 48% of Americans plan to leave an inheritance, but about a third are not planning on talking about what they’re leaving behind with their families. That’s according to an Edward Jones report.
So to break down how you should have the talk with your family, Lena Haas, Edward Jones Wealth Management and Solutions head is here. Thank you for joining us this morning. And so this idea that people plan on transferring their wealth but don’t plan on talking to their families about it, how do you even start those conversations then if people are so uncomfortable talking about their wealth transfers?
LENA HAAS: Thanks for having me. Great to be here. Yes, you are absolutely right. One of the interesting findings is that close to $85 trillion is going to be passed down from silent and baby boomer generations to the young generations between now and 2045, absolutely astounding amount of wealth and that those conversations are not happening.
And one of the reasons that we see this is the case is because it is an inherently emotional topic that oftentimes both givers and receivers associate with complexity, death, potential of harming relationships between family members. And so it is so critical to change that dynamic and make this a conversation about the transfer of wealth and values and caring for each other away from those negative associations.
RACHELLE AKUFFO: Yeah, it’s true. Because I mean, once we’re gone, that wealth is going to go somewhere. So at least by taking control of these conversations, it does help get that started. So what are the initial steps people should take when preparing for a wealth transfer?
LENA HAAS: Yeah. So the first one is to realize how important it is to have a transparent conversation with the family members because it can make all the difference between leaving a legacy that’s about anxiety or unanswered questions and resentment or really leaving a legacy of love and care for family members and others.
And in thinking about this conversation, it’s important to have it as an information exchange in a neutral setting. So don’t talk to your family members as a surprise over Thanksgiving dinner. Rather, understand who you should invite into the conversation, set a neutral place where you won’t be interrupted, develop an agenda.
And we saw that more than half of the participants told us that engaging a financial professional such as financial advisor to be that neutral moderator and coach really helps with the discussions and makes them much less emotional and more action-oriented.
RACHELLE AKUFFO: And so Lena, for people who are saying, look, I perhaps don’t have as much to leave. Maybe I don’t need a financial professional. They’ve had side conversations but haven’t actually put anything in writing. What should people be aware of when they’re deciding whether or not they need a financial professional versus another means of transferring wealth?
LENA HAAS: So that’s a great an important question because the way that people define transfer of wealth is really beyond dollars and cents. So somebody might think, well, we don’t have enough, but perhaps beyond the dollars in the accounts, they have real estate. Maybe they have family business and need to think about…
Read More: Why wealth transfers require ‘transparent conversation’: Expert