The last family taboo: talk openly about money.

There are many ways a family can work together to build wealth, both now and for the future. While the recipe is slightly different for every family, the main ingredients — open communication about money and a financial plan which can meet the needs of each generation — remain the same.

With many large, well to-do families — folks like the Bronfmans, the Eatons and the Reichmanns — plans are usually in place to ensure there’s a passing down of wealth and that family capital will grow. While each generation assumes the use of this money, it’s the ongoing assistance of a trusted financial advisor and regular family discussions which ensure the wealth stays where it’s supposed to — in the family.

The rest of us can learn much from the financial planning habits and attitudes of the very wealthy, particularly the idea of open communication about money and estate planning. Unfortunately, most of us don’t. Many families don’t like discussing money matters at all: They may lend it, give it as a gift, argue over it, spend it secretly or stash it in a drawer, but rarely do they feel comfortable talking about the responsibility of managing it.

“Money is the lastaboo in our culture,” says Olivia Mellan, a Washington, D.C.-based psychotherapist and author of Money Harmony: Resolving Money Conflicts in Your Life and Relationships. “Nobody talks about it. It’s a loaded thing. It represents love, power, security and control, freedom, self-worth, and on and on and on.”

Mellan counsels family members about ways to better deal with each other’s money habits so they can talk about it openly and without conflict. She says married couples are particularly vulnerable to money communication gaps. “Opposites attract,” she says, “and opposite money types are attracted to each other, too. Hoarders marry spenders, money worriers marry money avoiders and so-on.”

Couples approaching retirement are no-less vulnerable to conflict and money problems, particularly if all the responsibility for managing finances has been kept in the hands of one spouse. Hopes and dreams for retirement may remain unachieved, and financial disaster could strike if the two don’t talk about money plans, or if the sole decision-maker should become ill or pass away suddenly.

Parent-child discussions about money are also avoided. With the older generation, it’s a loss of control. With the younger, it’s a lack of long-term planning. Parents and grandparents often have specific desires about what the children should do with the money they inherit, Mellan says, and some children find this offensive. “The older generation fears a loss of control,” she says. “Their task is to learn how to let go, but the younger generation must be empathetic about how hard this can be.” As for the younger generation, they could be rebelling from parental control. “You’ll either adopt your parents money style, or you’ll be so annoyed or traumatized by it that you’ll vow never to be like them.”

In its educational program for financial advisors, You and Your Family Talking about Money, available at no charge through Midland Walwyn, Trimark Investment Management Inc. encourages planners and advisors to help bridge the communication gap between family members reluctant to talk about money. One way of achieving this is to have advisors work with family members one-on-one initially and, when the time’s right, bring everyone together to discuss the big picture.

In addition to bringing together family members, an advisor worth his or her salt will occasionally participate in family meetings with lawyers and other professionals — just to listen. That way, they can filter all the information and work it into a financial framework for the family.

But after years of silence or conflict, how can family members begin to talk about money? Mellan says a good starting place might be to sit down and write out all your financial and retirement goals -– short-term, mid-term and long-term. Do this several times over the years, she says. Couples should compare their lists. “If they compromise and there’s good communication, they can eventually get most of what they both need and want,” she says. Communicating across the generations could begin with a forthright, loving letter explaining what you need to talk about and why (estate plans, need for money, etc.).

Try inviting a family member to join in a financial planning session, or attend a financial planning seminar together. Wills should be properly set up for tax purposes and trusts, and distributed according to people’s wishes, not the interpretation of the courts. Open talk about money can help people plan for and prevent financial crises, too. “Open communication about money will improve your family’s financial outlook, but it could also make you happier and lead to a better relationship with your family,” Mellan says. “And that’s important.”