The Missing Piece in Many Financial Plans: Family Conversations About Inheritance
- Steven Bowles
- 6 days ago
- 5 min read
Many families do an admirable job with the basics of financial planning. They save for retirement, build emergency funds, and invest for the future. But one critical element is often overlooked: having real conversations about inheritance.
I've worked with hundreds of families over the past decade, and I've seen firsthand how this communication gap creates problems that no amount of legal documentation can solve. At Catalyst Advisory, we recently surveyed 1,000 American adults and found that only 14% have had detailed inheritance discussions with their family members.
This silence undermines otherwise sound financial plans and leaves families scrambling during already difficult times.
Why Inheritance Discussions Are Avoided
Most people are willing to discuss retirement accounts, investment portfolios, and insurance policies. They may meet with advisors regularly to review strategies. But many people stop before actually talking with family about what happens to those assets later.
Part of this comes from discomfort with mortality. Nobody wants to think or talk about death. There's also a cultural taboo about discussing money with family members. Some people worry about appearing controlling or creating conflict. Some believe their estate documents speak for themselves and assume conversations aren't needed.
But documents alone don't prepare families for financial transitions. They don't explain the reasoning behind decisions. They don't clarify expectations. And they certainly don't replace the understanding that comes from open dialogue.
The Real Cost of Silence
Our survey revealed that nearly one in four Americans (22%) who expect to receive an inheritance have never discussed it with family. These individuals may be counting on a windfall that won't happen, or they may be making false assumptions about the assets and how they'll be distributed.
This communication gap leads to predictable problems. I've seen families make poor financial decisions because they were caught off guard by an inheritance. I've watched beneficiaries struggle to locate assets or understand the reasoning behind distribution plans. I've witnessed conflicts between siblings who had different assumptions about their parents' wishes.
These aren't just problems for wealthy families. They affect anyone with assets to pass on. The middle-class family with a modest home and retirement accounts faces the same communication challenges as families with larger estates.
Financial Security Means More Than Assets
Here's what most financial planning conversations miss: true financial security isn't just about accumulating assets. It's about ensuring the people who matter to you are actually prepared for what's ahead.
That preparation requires knowing where assets are held, understanding the intentions behind estate decisions, and ensuring someone is ready to step into decision-making roles if needed. It means your spouse knows how to access accounts if something happens to you. It means your adult children understand your values around wealth and responsibility. It means someone knows whether you'd want to liquidate that rental property or keep it in the family.
In my work with families on inheritance and long-term planning, I see strong financial structures weakened by a lack of communication. A carefully crafted estate plan only works if the people it affects understand their roles and responsibilities.
Why Discomfort Creates Risk
Our survey found that nearly half of American adults (47%) are uncomfortable discussing money with family members. That discomfort has real consequences.
When conversations are postponed until a health crisis or death forces them, planning becomes reactive rather than proactive. Family members make rushed decisions without all the information. Important details get missed. Opportunities for tax-efficient wealth transfer slip away.
The irony is that avoiding these conversations to prevent discomfort often creates far more stress later. The difficult discussion you skip today becomes a crisis tomorrow when someone is grieving and overwhelmed.
Where Inheritance Fits in Your Financial Plan
So what does it actually mean to "talk about inheritance"? It's not about promising specific amounts or creating rigid expectations. It's about clarity and preparation.
These conversations support better retirement planning because they help everyone involved make informed decisions. They inform insurance decisions by clarifying what protection gaps might exist. They strengthen risk management by ensuring multiple people understand the full financial picture.
Life insurance often plays a role in these discussions. Many families use it as a tool to create liquidity when estates are tied up in illiquid assets, such as businesses or real estate. Others use it to equalize inheritances between children when one is taking over a family business. Some use it to ensure there's enough cash to cover final expenses and estate taxes without having to sell assets.
The main point here is that your family should understand the role different financial tools play in your overall plan.
Getting Started Without Overwhelming Anyone
The best approach is usually to tackle it in stages.
Start by focusing on goals and values rather than specific dollar amounts. What matters most to you about how your wealth is eventually used? What do you hope it enables the next generation to do? What concerns do you have?
From there, you can move into more practical matters. Where are important documents kept? Who should be contacted if something happens? What accounts exist, and how are they accessed?
The key is recognizing that small steps matter. You don't need to cover everything at once. You need to start creating the shared understanding that makes future planning more effective.
Free Download: Family Inheritance Conversation Starter Checklist
If you’re not sure how to begin the conversation, start here. This checklist walks you through what to cover before a crisis happens, including roles, document locations, account access, and next steps. Download the checklist here:
Planning Works Best When It's Shared
When asked what they would do if they had wealth, 91% of Americans say they would leave something behind, while only 9% say they would spend it all.
That tells us something important. The problem is a lack of comfort talking about money, not a lack of concern about legacy.
Many families value legacy deeply. They just don't know how to bring it up, or they assume they have more time than they actually do.
Inheritance conversations aren't a separate add-on to financial planning. They're a continuation of it. They're how you ensure all the careful preparation you've done actually serves its intended purpose.
Make this easier on your family.
Use this one-page checklist to guide a simple, clear inheritance conversation without turning it into an overwhelming meeting.
Your financial plan is strongest when expectations, communication, and preparation align. That alignment doesn't happen by accident. It happens through the conversations most families are still putting off.
The documents matter. The account structures matter. The tax strategies matter. But none of it works as well as it should when the people it affects don't understand their roles in the plan. That understanding starts with conversation.
About the Author: Steven Bowles, CLU®, is the founder of Catalyst Advisory, an independent wealth transfer advisory firm. He specializes in helping entrepreneurs, business owners, and investors navigate the complexities of legacy planning, but believes the fundamentals of good estate planning apply to every family, regardless of net worth. Steven lives outside Philadelphia with his wife and three sons.
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