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Talking about money can be a tricky topic on a good day, but one everybody wants to avoid during stressful times.
Over the next 20 years, the largest wealth transfer in Canadian history is set to take place, estimated at $1 trillion.
But, the inevitable exchange is being met with worry and fear by the ageing parents, based on their children's assumed lack of financial knowledge.
Whether you are one leaving the inheritance behind or you're the heir, there are conversations you should be having before it's too late.
Amanda Krushel is a financial wealth advisor with Valley First and she stopped by the KelownaNow studio to give some advice on how to broach the uncomfortable topic of money.
Here's some parting wisdom from Amanda Krushel on how to handle money conversations with your family:
1. Get a will
It's as easy as writing a few scribbles onto a paper napkin, but to avoid any family discrepancy, it's best to see a lawyer or notary to ensure your will holds up in court.
2. Understand yours and your spouse's financial situation
Having these difficult conversations can save partners and family members a lot of grief later in life.
You may not realize your partner has secret 'fun accounts' or know where they're set up. Ask. Krushel believes transparency is the key to easing your stress on managing money down the road.
3. Get your family's financial advisor's contact information
Making sure you have the financial advisor's contact info is especially helpful if you've been uninformed along the way. The advisor has likely been the most informed person at the table on all financial matters over time.
4. Make yourself part of the conversation
When it comes to making financial decisions as a household, Krushel says there's always one person with more financial knowledge. On top of that, there's always one person more keen to be the sole decision maker.
It's important to assert yourself in the conversation so you're making decisions together. That way you won't be upset about something happening later on, that you never spoke up about.
5. Learn more about finances
If you're not asserting yourself in conversations because you lack knowledge, then start learning. Three ways to get yourself up to speed include: searching the internet, asking trusted friends or meeting one-on-one with an advisor.
Some families prefer to meet alone with a financial advisor, but to maintain transparency, make sure the conversations are later shared with your spouse or loved one, said Krushel.
6. Choose an advisor you trust
Krushel said if your advisor doesn't speak in "sensible and concise" layman's terms, the chances are slim that you'll go back. Make sure you trust them and understand what they're saying - not dumbed down language, she said - but easy to understand.
7. Introduce your children or partner to your advisor
If you're the parent transferring funds to your children or spouse, the situation will be a great deal smoother if you initiate the conversation.
Get your financial advisor involved early on the transferring of funds. If you do this, there's a higher guarantee that your legacy will live on exactly how you planned.
8. Communicate!
At the end of the day, these conversations aren't easy to tackle, but are important.
Break the ice, stay transparent and get your financial advisor involved early, so there's less stress later.
Krushel reminds people leaving an inheritance that if finances aren't handled well, it's going to cause extra stress to the ones left behind.
*Before making any monetary decisions, be sure to consult your licensed financial advisor.
We want to hear from you!
What kinds of questions do you have around money and the management of funds?
Send us your questions or comments at news@kelownanow.com.
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