December 05, 2022

How to talk about money with your family over the holidays

By Sun Life Staff

Holiday gatherings mean food, family, fun – and finances? Here’s how to take advantage of a get-together to talk money, without dampening the festive mood.

The festive time of year usually means family time. This year, many of us are hoping to celebrate together with a feast and all the fixings. But after you and your kin tuck into the turkey, it might be time to actually talk turkey. That is, to talk about your family’s finances.

Does even the hint of a serious money conversation make you want to leave the room? You’re not alone! “Talking about money can feel as uncomfortable and taboo as having the birds-and-the-bees talk,” says Layne Choong, Sun Life advisor. “But money is one of the leading causes of stress. So, it’s vital for families to have a strong understanding of their overall finances. This way, they can avoid any future pitfalls.” 

That’s particularly true in uncertain times. These days, Canadian families are facing many challenges, including: 

  • living with inflation,
  • preparing for and weathering a recession,
  • interest rates,
  • irenewing a mortgage at a higher rate,
  • international tensions,
  • extreme weather, and
  • health scares.

But one way a family can handle a storm is by being on the same page. And how do you arrange that? By talking to one another. A family gathering this season might be the opportunity you need. 

Just talking isn’t likely to solve all the financial challenges your family members are currently facing. But by discussing them openly, you may be able to share ideas and even find some help.

Want to give it a try? Here’s how.

Why talk about money over the holidays?

Holidays are a good time for a family money chat because you’ll likely all be together. And also, year-end is a time for looking both behind and ahead. 

“Everyone talks about spending a little too much over the holidays. That’s understandable,” Choong says. “But a lot of people also have financial questions that they’ve been thinking about all year. Or for several years. Wills, retirement plans, life insurance – these are money matters that families don’t talk about enough. But they really need to. And with everyone gathered under the same roof, you’ll have the chance to have an honest discussion.” 

But bringing up such serious topics during a jovial holiday bash might ruin the mood. So, how do you approach the subject without being a buzzkill? Choong suggests putting together a schedule of all your holiday events. Then you can set aside a separate time to talk about financial planning. Your relatives may be flying in from another province or driving in from another city. Even if they’re just coming from the other end of town, book some time with them.

“I wouldn’t bring it up during a holiday meal or party, since that’s a celebration time,” Choong says. “I believe it’s best to hold off until a day or two after the festivities end. At that point, everyone’s a little more clear-headed and willing to listen.” 

What if an important family member can’t be there? You could set up an online feed so they can take part. Or, in case of in-person meeting restrictions, you could meet entirely online.

What 3 important money questions do you need to ask in a family meeting?

Before you set a time for the discussion, list everything you want to talk about. Make sure everyone knows what you want to discuss. “This way, they’re less likely to get upset over anything that comes up,” says Choong.

Depending on your family’s current financial situation, various subjects could arise. Things like:

These topics are all worth talking about. But if your family includes children or elderly parents, Choong suggests starting with these questions:

1. Do all the adults have a will? 

“If you die intestate – meaning without a will – the government decides who will manage your estate. They’ll also choose how your assets will be divided,” says Choong. This means they may not distribute your estate the way you want. A will formalizes who will look after children after their parents’ death. It’s also important to have a will if yours is a blended family.

Going through legal channels to sort out who gets what can take several years, depending on the circumstances. “It’s not a great situation to be in or to leave your family in,” Choong says. “You can avoid these complications by writing a will.”

2. Who is the executor for your estate? 

An executor carries out the terms of your will after your death. “People sometimes name a loved one or a close friend as their executor,” Choong says. “That’s fine. But all parties need to know what they’re getting into and how much work comes with the role.”

Executors have many administrative tasks, like:

  • Finding insurance policies and notifying the beneficiaries
  • Identifying and paying debts
  • Handling taxes and fees
  • Distributing assets to beneficiaries

“In some cases, being an executor can be like having another full-time job,” Choong says. “It’s a huge ask for a family member or someone close to you.”

What if the person you’ve asked to be your executor says no? You can hire a legal professional to do the job. You might also want to hire a professional if you expect your estate to be very large and/or complex. 

3. Who are your beneficiaries? 

Name a beneficiary – the person you want to leave your money to – on any financial product you can. Why? Because it’s a huge stressbuster for your family:

  • You don’t need to pay a lawyer to do it.
  • Your financial institution handles the paperwork.
  • Your beneficiaries won’t have to wait for your estate to be settled to get their money.

Some examples:

Let’s say you have a registered retirement savings plan (RRSP). By naming your spouse or common-law partner as your beneficiary, your RRSP can roll into theirs.

Or, suppose your money is in a registered retirement income fund (RRIF) or a tax-free savings account (TFSA). You can name your spouse as successor plan holder (TFSA) or successor annuitant (RRIF).

The most common place to name a beneficiary is on your life insurance policy. “Then the death benefit can bypass the estate and go straight to that person. You don’t have to wait for the executor to pay off debts and taxes first,” Choong explains. 

NOTE: When you name someone your beneficiary, make sure they know about it. That’s because only a beneficiary can file a life insurance claim. Your executor can’t do it unless they’re also a beneficiary.

You can often name several beneficiaries and give each a percentage share.

How do you start the financial conversation with your family?

Money is a sensitive subject, but talking about it doesn’t have to be crass,” Choong says. “Politely tell your family why you want this conversation. Let your relatives know that you want them to be in the loop in case anything happens.”

Another way to minimize the discomfort is to generalize the conversation. “Your family members may be uncomfortable disclosing exact dollar values,” she says. “So, don’t mention it. Instead, focus on the types of accounts and insurance policies you each have. Talk about where they are and who your financial contacts are. This could be your advisor, executor or lawyer.”

What if your family needs help talking about money?

Feeling uncomfortable or uncertain about where the conversation might head? It could be helpful for all of you to see an advisor together. Advisors can be great mediators. They can:

  • Walk you through all your financial options
  • Check off everything you need to address
  • Help you figure out a plan that’s right for your family

Some families have one advisor with whom they check in annually. “It’s great when family members have one trusted advisor they can turn to,” says Choong. “That advisor is likely to have a greater understanding of that family’s situation. So, they’ll be in a better place to give them advice.”

Of course, everyone can’t always have the same advisor. Your financial situation could be vastly different from that of your parents or siblings. Perhaps you live in different cities or provinces.

“It’s okay if everyone has their own advisors,” Choong says. “With your permission, an advisor can keep your family up to date on your plan. They don’t have to reveal exact dollar amounts or anything too specific.” This makes it easier for people who have trouble explaining or talking about finances with their close relatives.

Money can be complicated and emotional, but it’s important to talk about it. So, get the help you need to do it right.

Don’t have an advisor? Find a Sun Life advisor today

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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