Birds, bees — and the family money

Talking inheritance can be embarrassing — but necessary

Like the “sex talk” that neither parents nor children enjoy, discussing money — and especially money after death (inheritance) — is keenly avoided by many.

However, the unwillingness to discuss whether parents intend to, or are able to, leave an inheritance for their offspring means there is increasingly an expectations gap.

Last week, an Australian survey suggested parents were considered “stingy” by their children, for “racing around like oligarchs and burning through their bank balances” instead of preserving assets to help their kids into a new home.

National Seniors Australia and investment firm Challenger quizzed 5800 Australians aged 50-plus and found only 3 per cent plan to preserve their savings to give to their kids after they’ve gone.

Just one in four said leaving a family nest egg was a top priority.

Unfortunately, a reasonably large percentage of millennials (the offspring of the over-50s baby boomers) hope — nay, expect — their parents will share some of the assets they’ve been able to accumulate by living in an era of house price inflation. lead to (or add to) family drama.

The surveys illustrate the depth of f eeling, with many potential inheritors suggesting seniors have had it relatively easy and should share their good fortune with the current generation.

Then there are the boomers who think millennials are greedy and entitled: “We worked hard to make our money. You should do the same, and not rely on the Bank of Mum and Dad”.

I have seen instances of older parents going without, in order to leave something for children who don’t expect anything, and are already better off than their parents.

I’ve also seen kids’ inheritance expectations dashed as the parents lived long lives and spent rather more than the kids thought (or hoped).

Best laid plans can go awry, with large market movements or unexpected health costs shrinking the nest eggs of many a retiree.

While every family’s circumstances will differ, and there is no one-size-fits-all solution, communication is an easy and important first step.

While your kids can learn about the birds and the bees elsewhere, they need you to tell them about the family finances.