Agony Aunt: Should I tell my family my financial secrets?

Dear Janine,

Recently an older member of our extended family passed away and we had to deal with sorting out all his financial matters.

It was stressful, as no one knew where his money was or if he had any life insurance. It took ages to track down the solicitor holding the will. We even discovered a property no-one knew he had.

After that experience, I think we need to tell our kids about what we own and how we plan to split it up when we go. My husband doesn't agree. What do you think?

ANSWER:

NOTE to self: ring my father and ask where he has hidden the wills. He's as fit as a buck rat, so no urgency on that one. But that's the point, isn't it? People put off these conversations, or never have them.

You have to admit that sitting down with your adult children and going through your finances, would cause the most hardened person to grimace. Most men would probably agree to a prostate exam quicker than they'd agree to the real family jewels being inspected.

Look at it from your husband's point of view. He'll be imagining a nightmare scenario where you gather the troops for Sunday dinner and begin to make an announcement about the importance of wills, inheritances and transparency.

He will be visualising that horrible silence where everyone thinks you're about to announce the arrival of the terminal nasties.

When they realise you're not going to cark it, and that the conversation is simply for the purposes of good housekeeping, there will be a bunfight over who wants the Crown Lynn swan and who gets the pink china pig with detachable ears.

They'll start rushing about with stickers, putting names under the ornaments. Everyone will boo when you reveal that the Cats' Protection League is getting a donation, and they'll start lobbying for their own personal favourites. This is how to wreck a perfectly good Sunday dinner.

Then your husband will be worried about the level of financial detail you want to go into. Or, more accurately, the level of detail that might get blurted out. In any uncomfortable situation, most of us don't know how to end a sentence.

We just keep talking into the silence. Hasn't every couple been in a situation where you've wanted to wrap the other one's head in masking tape?

Finally, he'll be worried about the consequences of revealing too much about your assets. Even when you conveniently overlook valuation details, the result is that other people will grossly over-estimate what you've got.

You've told your children that there is a share portfolio with Macquarie and one with Forsyth Barr, and some unit trusts with Fisher Funds and Devon Asset Management. But your husband is dreading those hushed conversations where they play "guess the amount"; one thinks $50,000, and the other is convinced you've got half a million stashed away.

There's often one black sheep in a family (the one who is hopeless with money), and inflated expectations could start their pleas for immediate help.

It's no wonder these things end up in the "too hard" basket. People don't know how to start the conversation, how much detail to give, and what the unintended consequences could be.

You probably feel like I've shot you down in flames. Quite the reverse. I totally agree with you. The conversation must be had, and it's irresponsible not to have it. While you're passing through the pearly gates, the last thing your family needs is more stress. To get your husband onside, you are going to need to talk about the three areas that will be worrying him.

How to start the conversation with your children. If you are not in favour of the theatrics of a family dinner, keep it casual.

The next time one of your children calls in for a cup of tea, bring it up. Just say you were thinking they needed to know where important documents are and who your solicitor is, so you'll be writing it down and giving a copy to each of them. Ask if they think that's a good idea.

Once one is onside, the family gossip machine will probably take over. The rest will know before the end of the day that you're in a morbid mood, but it's a good idea to have the information.

The level of detail. Some couples have one house, one car and one savings account. Others have rental properties, businesses, share portfolios, life policies, offshore funds and family trusts.

Are you happy to give a broad breakdown, or is it just easier to give out details of your accountant, solicitor and trustees?

Unintended consequences. Have an open discussion with each other about how much information each child is capable of handling. While the best policy is always to give out information equally, caveat that by considering any unintended consequences. Are any of them prone to coming to you cap in hand, if you reveal that certain assets exist?

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.