Despite its importance, investors are not sitting down to talk with their parents about a variety of essential topics, including inheritance, estate planning, and long-term care, according to Northwestern Mutual’s 2023 Planning & Progress Study.
In fact, only 29% of 2,740 U.S. adults surveyed said they have spoken with their parents or guardians on the matter, the study said. While more have spoked about long-term care, it was still only 43% of the respondents.
“That is a very low number,” said Chris Collins, wealth management advisor for Collins Financial, a Northwestern Mutual Private Client Group. “I would like to see that higher.”
One reason for the lack of conversation may be differences of opinion in when these difficult conversations should be held. The sense of urgency around estate planning discussions seems to be negatively correlated with the age of the survey respondents: When asked what the appropriate age is to talk about inheritance and estate plans, members of Generation Z and millennials said 47 and 45 respectively, while Generation X and baby boomers and older said 51 and 55, respectively.
Similarly, the generations cannot agree on a suitable age to begin long-term healthcare discussions. Baby boomers and older say it is 53, while Generation X said it should be 49. Meanwhile millennials said that 40 is the right age and Generation Z said it is 42, according to the study.
“Families should have these challenging conversations at some point, because if they don’t, loved ones may need to make difficult decisions on their own,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “Younger generations are wisely choosing to talk sooner.”
While those conversations might be difficult, they are essential. Advisors should encourage their clients to talk with their parents and if need be, use their financial advisor as the ice breaker to initiate the conversation.
“Use me as an excuse this Thanksgiving or this Christmas or this holiday to ask those questions because they are somewhat uncomfortable for some folks,” Collins said.
During the course of those conversations, adults should find out from their parents if there is a will, if it has been updated, and who will take care of the parents if they become sick.
The younger generations are more comfortable having conversations with their family about money at younger ages, according to the study. On average, those surveyed said 17 was the age when it was appropriate for children to first speak with their parents about the family finances, according to the study.