Americans have historically been reluctant to discuss financial matters among family members, but a recent study by Fidelity Investments found that attitudes toward them taboo wealth topics they change.

Loyalty Wealth Status Mobility study It found that 56% of Americans did not discuss family finances with their parents as children. Of that group, 82% wish they had financial education at an earlier age because they think it would be beneficial.

It also found that Americans' attitudes toward these talks are changing, with 83% of respondents saying it's important to talk about it. money management with children and 67% of parents already talk to their children about family finances.

“Money and wealth are historically one of the topics we don't like to talk about,” David Peterson, head of advanced wealth solutions at Fidelity Investments, told FOX Business. “Wealth is a deeply personal experience, so it's not surprising that in some respects people have historically been uncomfortable talking about it.”

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According to a study by Fidelity, Americans are less comfortable with the once-taboo financial talks. (iStock / iStock)

“Research has shown that people begin to sort of break the cycle of avoiding family discussions. And clearly, if you intergenerational wealth transferit's kind of a generational difference, and what we're finding is that older people in general — they're not as comfortable talking about it,” Peterson said.

Peterson said many Americans have experienced the fallout that can occur when a parent who isn't very open about their finances begins to decline and family members have to step in to help take care of the finances.

“When people start to get to the end of their lives and suddenly they can't manage their finances or they're no longer able to make decisions, you start to see things go a little out of whack because they haven't shared with their families what their wealth is, where their wealth is, what it's made of,” he said. “And you can very quickly find yourself in a situation where, at a really emotional time in life, how do we manage mum and dad's finances when people can no longer do it themselves?”

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Peterson suggested that families approach financial conversations as a process rather than trying to tackle them all at once. (iStock)

She said it's important for families to have documentation including a health care representative or health care provider power of attorney To help navigate the health care system, as well as a living will with instructions about individual expectations around. A financial power of attorney is another key document that authorizes someone to act on their behalf in financial matters.

Families also need to consider other end-of-life documentation and appointments, Peterson said. Broker accounts can be easily transferred to the surviving owner, while beneficiary designations can also be included to transfer accounts to a beneficiary on death.

“You really need a will that takes into account all the things that don't have a name or beneficiary designation,” he said. “And then, in some cases, it can be beneficial to have a trust and place the assets in that trust so they can go into an account with a beneficiary designation. The trust will then determine who gets all the assets. trust.”

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Fidelity research has shown that people with financial plans are more confident in building and protecting their wealth. (iStock / iStock)

Peterson suggested that to get the ball rolling, it can be helpful to understand that this cannot be a one-time conversation and that there is more of a process to reduce some of the pressure and emotions surrounding these conversations.

“I think for some people it works really well to have a very strict itinerary of what you're going to talk about; for others it doesn't, and my advice is not to go into a conversation thinking it's going to be a -and-done conversation. 'Look, I'm in and now I'm gone.' I remember talking to my dad, and you'd think it would be easy for me, but it's not, because these things get wrapped up in all kinds of things. emotions.”

Sharing some details about financial accounts and contact points can also be a good first step, even if it doesn't lead to full disclosure about the specifics of an older person's wealth, he explained.

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“Given that older generations, in particular, are not so keen to disclose the full details of their wealth, what I often recommend is to at least share what it is, not the absolute amount, but where it is; who are the main people? If a family member has more information about it, reach out and keep it all in one place that's easy for people to find,” Peterson said.

“Probably the first step is to really do an inventory of what's out there, the balance sheet, the wealth statement, the net worth statement, whatever you want to call it — but it's a list so that when somebody needs to act on it, they at least know where to go,” he said. “And so, you maintain that sensitivity of how much is in all of these different accounts banks or financial institutions.”

Regardless of the process that individual families use to build their financial plans, Fidelity's research found that having a plan builds confidence. While nearly four in 10 Americans worry about losing their wealth, 78% who have a financial plan say they are confident they are taking the right steps to build and protect their wealth. without plans.