THIS CONTENT IS SPONSORED BY PRUDENTIAL
Whether speaking to children about college costs or aging parents about living expenses, openly discussing money issues with family is crucial, though sometimes difficult.
Producing multigenerational wealth is a goal for many people. Yet, that planning process should not solely be about preserving wealth. Instead, it should be about cultivating funds to help build perpetual prosperity for future generations.
DISCUSSING VALUES AND PRINCIPLES IS ESSENTIAL EARLY ON
A key element of proficiently transferring wealth from one generation to the next should not just include giving away assets. To elaborate on that, BLACK ENTERPRISE caught up with Keita Cline, Prudential VP of Business Development. He pointed out how a family’s support of shared values, stating financial goals, and financial education can help perpetual prosperity for future generations.
Cline stressed that the baseline that underpins it all is that you can build money for any generation. However, he says, “What happens is people don't talk about what the money is for or what's being passed on is for, and these are the values. That’s the most important part.”
To help build a strong long-lasting legacy, he suggested talking to family about money and making it habitual. Talk to kids at their various levels as well as parents. Don’t be afraid to ask what’s going to happen down the road? Cline says he has kids who are going off to college and parents who are getting a bit older. “We’re having to think about their latter life and what’s going to be happening there.”
And you must consider managing both of those circumstances while still ensuring you’re taking care of yourself. He suggested asking parents what they do they have set up and what we should be doing there. “What happens if you need care down the road? How do you want that to happen? Which of us in the family do you want to handle in the case of a power of attorney type situation?"
And the stakes are high. Black Americans could miss benefiting from a $68 trillion transfer of wealth by 2047, partly due to insufficient estate planning.
Cline stressed that the baseline that underpins it all is that you can build money for any generation. However, he says, “What happens is people don't talk about what the money is for or what's being passed on is for, and these are the values. That’s the most important part.”
To help build a strong long-lasting legacy, he suggested talking to family about money and making it habitual. Talk to kids at their various levels as well as parents. Don’t be afraid to ask what’s going to happen down the road? Cline says he has kids who are going off to college and parents who are getting a bit older. “We’re having to think about their latter life and what’s going to be happening there.”
And you must consider managing both of those circumstances while still ensuring you’re taking care of yourself. He suggested asking parents what they do they have set up and what we should be doing there. “What happens if you need care down the road? How do you want that to happen? Which of us in the family do you want to handle in the case of a power of attorney type situation?"
PRUDENTIAL “STRATEGY” HELPS BLACK AMERICANS BUILD GENERATIONAL WEALTH
To help assist with such affairs, Cline pointed to Blueprints to Black Wealth, a pledge by Prudential to boost awareness and understanding about the financial power and readiness of Black Americans. It includes expanding Black Americans’ access to financial tools and services, including life insurance, to help them grow and sustain wealth. Calling it a strategy opposed to a program or initiative, Cline says a key focus is getting more wealth building and generational wealth building tools into the hands of Black Americans.
He says Prudential just launched a piece that specifically covers how you can have a conversation with the family and how to talk across generations about it. It was referenced that families who have that conversation typically are among ones to continue to make progress generation over generation. And that can occur despite a family economic status of being affluent or low income.
As well, Cline says understanding budgeting, saving, and investing is crucial pertaining to foundational values, financial education and literacy. “Having that knowledge helps people make informed decisions, and it then reinforces strong financial habits and consistency” He added practices like saving regularly, avoiding the wrong kind of debt, and living within your means are also important.
TOOLS TO HELP MAKE FAMILY MONEY TALKS EASIER
At the same time, having conversations about money can be difficult, challenging, and uneasy for families, including interaction with children. But Cline says there are tools to bridge the conversation. Those tools can include talking with a financial advisor whose job is to do this. Cline says another move is to consider a financial coach who can provide new ideas and help at least refine some of what you're working on.
He says a coach can offer guidance, but you remain in charge. Cline says tell them what direction and what you're trying to accomplish. He suggests telling them, "Help me put this together because this is what I want this cake to look like when it's finished baking."
Further, Cline says estate planning should also be considered. In general, that process can help establish where an individual’s holdings, like homes, money, and other assets, go after death. Not having one could lead to legal problems and cause family squabbles. Contrarily, an estate plan, including a will or living trust, can help erase those feuds. before or after death. Only 33% of Black Americans have talked their parents about long-term care options and preferences provided they’re needed, based on this report.
Cline says one of the worst things that could happen to a family, something he has seen help seen happen in the Black community, is somebody dies intestate. That means without a will, and it must go to the courts to probate. He stressed it takes forever and is so costly.
The uplifting news is many people want to leave a legacy. Cline says the most recent survey by Prudential showed that 80% of Black Americans reported they want to pass some type of wealth to the next generation. They too have a strong commitment to their financial freedom in later years.
“So, the desire is there, and when you address and talk about maybe mistakes or challenges that you faced in the past, guess what happens? Most of the time, you come out of that, and you accelerate. You accelerate from there because it's a now you know type phenomena.”
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