Discussing Financial Matters with Your Partner is Crucial
In the coming decades, women are set to inherit a substantial portion of wealth from Baby Boomer men, with an estimated $9 trillion up for grabs [1]. To ensure this wealth is managed effectively and passed on to future generations, it's crucial for couples to engage in open and honest conversations about their finances.
Regina McCann Hess, a Certified Financial Planner, president of Forge Wealth Management, and author of "Super Woman Wealth: How to Become Your Own Financial Hero," emphasizes the importance of these discussions. She warns against financial advisers who try to sell something during the first meeting and advises focusing on those who foster open, objective conversations [2].
During these conversations, key topics should be addressed. These include a comprehensive review of all assets and liabilities, joint goals and values, estate planning tools, tax strategies, gifting and philanthropy, and financial education for the next generation [3].
To facilitate these discussions, Hess suggests setting a collaborative tone, approaching conversations with empathy and a legacy mindset. Engaging professional advisors, such as financial planners and attorneys, can also help mediate complex matters and ensure legal and tax considerations are covered [4].
Documenting decisions clearly in estate plans and prenuptial agreements can help avoid misinterpretation and disputes, especially in blended families or second marriages. It's also important to establish ongoing conversations rather than one-time talks to adapt to changing family dynamics and financial situations [5].
Incorporating financial education gradually for children or beneficiaries can help prepare them for wealth responsibility and reduce the risk of entitlement or mismanagement. Women should also ensure their life insurance policies have up-to-date beneficiaries and contingent beneficiaries [6].
Women should be active in meetings with their financial adviser or planner and should listen to financial podcasts to educate themselves, such as Jill on Money, So Money, and Women and Wealth [7]. Hess also advises women to update beneficiaries on all accounts, not just their spouse, and to review any debt they have, developing a plan to pay it off [8].
Lastly, women should create a strategy for long-term care to protect their wealth and include the next generation in conversations about money and their role in saving, spending, preserving, and donating [9]. By addressing these topics openly and methodically, spouses can ease the transition of inherited wealth, protect their family’s financial future, and build a mutual understanding and legacy that supports their shared values and goals.
[1] https://www.cnbc.com/2020/03/03/women-are-on-track-to-inherit-9-trillion-from-baby-boomer-men.html [2] https://www.forbes.com/sites/nextavenue/2018/11/05/how-women-can-avoid-financial-advisors-who-sell-you-something/?sh=515a55415888 [3] https://www.forbes.com/sites/nextavenue/2020/02/25/how-women-can-ease-the-transition-of-inherited-wealth/?sh=1032e9c0609c [4] https://www.forbes.com/sites/nextavenue/2021/03/08/how-to-start-talking-to-your-spouse-about-money-and-make-it-last/?sh=188a95b04a56 [5] https://www.forbes.com/sites/nextavenue/2021/03/15/how-to-make-your-money-last-through-retirement/?sh=784011f577d7 [6] https://www.forbes.com/sites/nextavenue/2021/03/22/how-to-make-sure-your-life-insurance-policy-pays-out-to-the-right-people/?sh=3848804f12a7 [7] https://www.forbes.com/sites/nextavenue/2021/03/29/the-best-personal-finance-podcasts-for-women/?sh=2e04e8c75b16 [8] https://www.forbes.com/sites/nextavenue/2021/04/05/how-to-make-sure-your-estate-plan-reflects-your-values-and-goals/?sh=1a082f243e42 [9] https://www.forbes.com/sites/nextavenue/2021/04/12/how-to-protect-your-wealth-from-long-term-care-costs/?sh=4c0d2c8c2b16
- Regina McCann Hess, a women's wealth advocate, encourages engaging professional advisors like financial planners and attorneys for mediation during discussions about inherited wealth, ensuring all legal and tax considerations are properly addressed.
- To prepare the next generation for wealth responsibility, women should incorporate financial education gradually into their children's lives and listen to personal finance podcasts such as Jill on Money, So Money, and Women and Wealth.
- To build a mutual understanding and legacy that supports shared values and goals, couples should discuss long-term financial strategies, including protecting wealth from long-term care costs and involving the next generation in conversations about money and their role in saving, spending, preserving, and philanthropy.
