Talking about personal finances can be uncomfortable and even rude in many situations, but if you plan on leaving assets to heirs – or not – there are instances where you might want to let them know.
Ameriprise Financial's latest Money & Family study found that 78% of investors with at least $100,000 in assets are taking steps to build generational wealth, and 67% of respondents said that passing financial gifts down to loved ones is important to them.
But those who plan to leave assets to their kids or other beneficiaries are also tight-lipped about letting their heirs know, with only 19% saying that they are completely transparent with relatives regarding their intentions for passing down their estate.
The number one reason investors gave for not sharing their plans with family members was that "it's none of their business," (33%), followed by "I have shared some information, but don't feel it's necessary to be completely transparent," (32%), and "I don't want to deal with any conflicts that might result" (18%).
But Marcy Keckler, senior vice president of financial advice strategy at Ameriprise, says there are times when it is important to let heirs know, or at least give them an idea, of what to expect when it comes to their inheritance.
One of those instances is when an estate includes real property, and that involves a majority of those surveyed. Sixty-eight percent of respondents to the survey plan to leave real estate to their heirs, but more than half (56%) have not told their loved ones about their intention to do so.
Yet, 40% of the investors planning to leave real estate to kids or other beneficiaries have concerns about how it will work out, with 15% saying they worry about the heirs being able to afford upkeep and taxes on the property, 14% saying they are concerned about conflicts between heirs over the property, and another 13% fearing their heirs will sell the property soon after inheriting it.
"Whether their fears are founded or not, the concern we have is that these investors are avoiding topics of conversation that can have major impacts on the legacy of their estates and cause confusion and hurt feelings down the line," said Keckler.
"We understand that money can be a stressful topic, especially among family members whose shared histories and financial situations may be complicated," Keckler continued. "That said, keeping everyone in the dark can exacerbate tensions."
Keckler told FOX Business that Ameriprise also asked folks who inherited real estate in the past to share their advice for others planning to pass down a property, and another top three list emerged:
1) Have a detailed plan in place.
2) Make sure a lawyer is involved.
3) Make sure you communicate the details about the real estate and the plan in advance.