Linda Davis Taylor
Oct 15, 2015 · 4 min read

Why You Should Talk To Your Family About Money

At home and in business, it takes courage to plan for the future. At home, it also takes courage to talk openly about finances. Financial education falls onto the shoulders of family members because there is no other formal way in our society where those skills are taught. Schools aren’t equipped to do it. If your kids are young, talk about allowances, saving and spending. When your kids are older, talk to them about what it costs to run a household or set a budget. Eventually you can talk about the cost of living in different states, the fluctuating costs of a gallon of gasoline and how credit cards work. If you start conversations early and keep them going year to year, planning for your family’s financial future will be a much easier and more natural discussion.

Families sometimes avoid difficult conversations because they’re afraid that having them will cause problems. But not having the conversations causes more problems. Although most of us don’t have a strategy in mind when we start our families, it’s precisely what we need to create a family that prospers beyond one generation. Just as companies take specific steps to get their succession plans in good shape in advance, families should do the same. No family strategy is complete without a succession plan. So what do you need to know?

Develop your philosophy. The sustainability or wealth of a family is defined by much more than money. Wealth isn’t just about assets. What most of us want to pass on are our values, because those principles are what keep people going through thick and thin. Ultimately, what is the family philosophy? Whatever it is, it’s better to know in advance so there’s no confusion, frustration or resentment down the line.

Inventory everything you own. Questions about how much to leave spouses, children, family, friends, and charities can be complex. Give yourself time to consider the options. And time to change your mind.

Document your wishes. Invest in professional help. Misunderstandings caused by incomplete or poorly drafted legal documents can be costly, both financially and emotionally. Make sure your next of kin or other representative knows where to find the information.

Don’t forget the stuff. Personal possessions are particularly prone to cause problems among heirs, because these represent their most cherished family memories. Consider asking your loved ones in advance what would be most meaningful to them as you are deciding who will receive what. You may be surprised. The smallest items sometimes have the most meaning. Openly discuss tangible objects, like jewelry, clothing, musical instruments, photos and art.

Determine who will manage your estate for you. And then talk with that person about it. Serving as an executor or trustee is an important responsibility. It’s a business matter, not a matter of who’s necessarily closest to you. A professional trustee can be a prudent choice.

Discuss your plans with your family. Communicate. Communicate. Communicate. There are different points of view about whether it’s wise to talk about dollars. What is more important is explaining why you’re doing what you’re doing. Everyone may not agree with your decisions, but at least you want your family to understand your rationale. Deciding with whom and how you wish to share the wealth it has taken a lifetime to accumulate is a reflection of your unique life choices. It’s personal. This is a truly the time when “no regrets” matters.

Tell your story to those you love. You’re so much more than what you own. Don’t you want to pass that wealth on as well? Write a letter. Make a video. Whatever method you choose, take the time to tell others in your own words what’s been important to you. Telling your story is as good for you as it will be for them.

When families are organized with a business mindset, parents set up their kids for future success Remember, this doesn’t mean having one conversation and then you’re done. Revisit these conversations over time — especially after any big financial change. Family is really another business that we’re running. And we can’t just create the family, go to work, and assume everything is going to turn out fine unless we focus on teaching strategies. It’s kind of tough to go back and teach those things when your children are already out in the world.

© 2015 Linda Davis Taylor, author of The Business of Family: How to Stay Rich for Generations

Author Bio
Linda Davis Taylor
, author of The Business of Family: How to Stay Rich for Generations, is the CEO and Chairman of Clifford Swan Investment Counsel in Pasadena, California. A participant in a fourth generation family business, Linda is a frequent speaker on wealth transition, family governance, and philanthropy. In addition to her investment counsel career, she has had over twenty-five years experience in senior leadership positions at Emory University, Claremont McKenna College, Amherst College, and Scripps College. Linda has served as a trustee for numerous educational and non-profit organizations and is a co-founder of a private foundation. She and her husband are the parents of two adult daughters. For more information please visit

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