When loved ones sit down to talk about family wealth, the conversation can go in surprising directions.
Katherine Dean, head of Family Dynamics for Wells Fargo Private Bank, recalls meeting with a family to discuss estate planning. The parents explained to their three adult children that each of them would inherit a substantial seven-figure sum.
“All three said, ‘We don’t want it,’” Dean recalls. “That surprised the heck out of the parents.” (Read on to learn why the children felt this way.)
Surprises are common, Dean says, when families talk about money. Different generations often share the same values but may have different priorities.
Here, Dean outlines three key practices that can help foster productive conversations about family wealth.
1. Signal before switching lanes.
Families often have long-held, but usually unstated, methods of interacting and communicating. When one generation tries to change the focus to something new, like wealth planning, discomfort and distrust can result.
“People will typically jump to negative conclusions about what will be said—especially if they haven’t been given advance notice about why it’s being brought up,” Dean says.
Instead, Dean recommends the organizer let others know ahead of time about new topics to be discussed along with assurances they will have a chance to weigh in.
After introducing the new topics, she suggests the organizer could say: “We would like to know: ‘What questions do you have? Are there other things you think would be important for us to talk about as a family?’”
2. Create a safe space.
Conversations about family wealth can be fraught with tension, Dean says. Rules can help.
“Ground rules are simply a bullet-point list of things everyone is agreeing to,” Dean says.
Family ground rules are usually generated collaboratively, though Dean says she and her colleagues often help facilitate the conversation.
They might include things like “only one person speaks at a time” or agreeing on what information needs to remain private versus what information can be shared with friends or extended family members.
Sometimes, Dean says, the rules can be based on a family’s unique dynamics. One family she worked with banned sarcasm during discussions.
3. Work to understand others’ communication styles.
Dean says she often uses assessments or questionnaires to help family members understand their communication styles as a way to short-circuit conflicts.
“Think of a time when one of your siblings was rubbing you the wrong way,” she says. “Rather than seeing it as ‘You’re just doing that to irritate me,’ the truth may be, ‘You’re doing that because that’s how your mind works and how you think. It’s not intentional.’”
Professionals trained to facilitate family discussions have other tools, too. Dean, for example, often conducts a values discovery exercise to help individuals and families define and share their priorities.
The results can be fewer arguments and a better understanding of loved ones’ views of topics related to family wealth.
And what about those three kids who didn’t want to inherit large sums from their parents? It turns out the children were already doing very well professionally and financially and were concerned that the extra wealth would make their own estate planning more complex.
“Their desire was to give that inheritance to the next generation,” Dean says. “The family agreed to that, and it worked out.”