Talking about emotions and money can be one of the most complex and taboo subjects. There is often the false perception that money is neutral, a mathematical element that can be considered “objectively.” However, the reality is that every financial decision is infused with an array of choices about values, and the domain of what we value inherently emotional and complex.
When it comes to families and inheriting money, there is no greater example of the ways values and emotions come into play. Families of any financial level may be familiar with this phenomenon, where objects of objectively low or no financial value become imbued with significant emotional and symbolic value. This can be the source of significant comfort and carrying on of important family traditions like using grandma’s serving dish at Thanksgiving or wearing Grandpa’s pocket watch on your wedding day. Sadly, this can also cause conflict and division within families, and for families with significant wealth, the stakes are exponentially higher.
This conflict and risk to sustaining wealth can be eased by implementing two strategies. While effective estate planning is an essential foundation to the successful transfer of assets, that alone will not prevent conflict and disharmony. The additional step required to complete any estate plan is to communicate your plan. The second strategy is to share family stories along the way. Financial inheritance without a strong independent sense of family identity may cause more harm to beneficiaries than no inheritance at all. That may seem like a preposterous claim, but consider more on these two strategies- communicating your plan and sharing family stories.
To understand why communication and family stories are so important, it is essential to understand some elements of the psychology of inheriting money. Money can create such outsized conflicts in families because it is often seen as a proxy for love. Uncommunicated inheritances can raise deep questions like, “Did they not trust me, or did they love someone else more?” You don’t have to look very far to find siblings who were very close throughout their lives, finding themselves in a deep conflict around inheritance. Most of those conflicts are not about money or economic value, they are about questions of love.
For many beneficiaries, there are complicated feelings associated with inheriting wealth. One might feel guilty that they inherited assets they didn’t work for, or might have tangled emotions about the assets themselves. This can trigger existential questions like, “Am I valuable?” or “What is my purpose?” It is easy to get stuck in these questions, and it is important for inheritors to become empowered to make decisions about inherited stocks, bonds, real estate, businesses, and other assets, even when they are loaded with emotions.
Truist Wealth’s Center for Family Legacy says, “The first step in understanding and overcoming these challenging emotions is to become explicitly aware that these feelings exist and then to look more deeply at their cause. Often, these burdensome feelings have little or nothing to do with you. Instead, they tend to reflect someone else’s perceptions and feelings.” Having a trusted advisor as a partner in that process can be essential to success.
The power of communicating intentions & sharing family stories
Effectively communicating the estate plan helps to manage both the financial assets and the emotions that come with them. For business owning families, the question of succession is one of the most complicated decisions they will face. Some heirs might continue on with the family business, while others decide it isn’t for them. When the business is passed on to several family members, the issue can become complicated and emotional. Even family members that don’t work within the family business, may have strong emotions tied to it.
The Center for Family Legacy worked with one family in which five siblings stood to inherit a family business. Two, a son and a daughter, were already working in the business, while three had pursued separate careers. The parents felt they had a well-thought-out succession plan for the family business which included the son taking over as CEO. To prepare for this eventuality, the family began to meet to plan for the future. During these meetings, not only did the three children who weren’t working in the business start to feel much more connected, but the son revealed that he did not want to take over the family business, while the daughter revealed that she did. Another family member who did not initially work in the family business decided to begin doing so.
All family members agreed that the process of having structured family meetings and communicating with one another helped clarify assumptions and resulted in the creation and implementation of a family succession plan that aligned with the true goals and aspirations of the entire family.
Family properties are another place where emotions and finances can be especially poignant. Family members create memories through a family-owned property and thereby gain a sense of family identity, separate from the family’s finances, that is associated with that shared experience. The Bush family illustrates an example of this. George and Barbara Bush’s children inherited Walker’s Point Estate in Maine. “The thing that drew us together was Walker’s Point,” says former Florida Gov. Jeb Bush in an interview with Truist CEO Bill Rogers. “When my mom and dad passed, they gave us the thing that was most precious to them so that [the siblings and their families] would be together.” He adds: “There’s such a huge sense of community there. They’d be happy that their vision, their legacy, has been embraced by their children, their grandchildren, and their great-grandchildren.”
This example illustrates how a family with complex financial or business ownership can cultivate an identity based around shared values.
Communication and empathy
Inheriting family assets can be an emotional experience, and it is important for family members to be able to communicate their complex feelings about this experience with one another. Although family members might disagree on certain issues, they can find a path forward. Family meetings to discuss values, purpose, mission, and legacy are an effective strategy in which to do this says David Herritt, head of the Center for Family Legacy.
Through this communication, “Families can see their shared values,” he says, “and understand that they can live those values together but have enough flexibility and empathy to allow one another to express those values differently through their preferences.”
Communicating intentions and sharing family stories while spending time together are invaluable gifts to the whole family. Communicating intentions early helps your family navigate the complex emotions that come with the transfer of wealth. By incorporating the practice of regularly sharing family stories, families can cultivate a shared identity beyond the financial capital.