Q: How do we tell the kids about our family wealth?
A: First and possibly most important point: they already know. By the lifestyle you lead and the people you mix with, your children have already made assumptions about the family wealth. They will also have garnished information on this topic from friends and from public sources. That means in terms of controlling the conversation, you are already well behind, so be aware of what you can and can’t control when it comes to talking about wealth. That also means it’s never too early to be aware of the messages you are sending to kids – both implicit and explicit.
The way to approach talking to kids is to lay a strong foundation. Wealth, in and of itself, is not a foundation. It’s not a goal; it’s the means to a goal. The foundation is around the values and beliefs about wealth: what does it mean to be wealthy? what can money buy and what can’t it buy? what responsibilities come with wealth? what are the family values that transcend wealth?
These are deep and difficult questions. Before attempting to talk about them with kids, ensure you have some answers to them for yourself. That can be a process in and of itself. It might be helpful to have some of these discussions facilitated by an external advisor to ensure that you are well prepared, and that they stay on track.
When to actually sit down and talk about it? Milestones are useful: when kids complete school, get married, or themselves have kids. Always be prepared to answer the question “why are we talking about this now?”
Consider This: In what ways does your family talk (or not talk) about wealth? How did you find out about your family’s wealth (I found out when I was teased in school)? With that in mind, how would you like your kids to find out?
Original articles: https://www.wealthprofessional.ca/news/opinion/top-concerns-of-family-office-clients-wealth-disclosure-to-children/362291, https://economictimes.indiatimes.com/wealth/plan/how-to-involve-the-full-family-in-money-decisions-10-things-you-should-do/articleshow/87390847.cms, https://www.globalbankingandfinance.com/its-time-to-talk-intergenerational-wealth-planning/, https://www.barrons.com/articles/how-to-talk-to-your-adult-children-about-your-finances-and-why-its-important-51631912873, https://www.forbes.com/sites/dennisjaffe/2019/05/29/what-do-we-tell-the-children-intergenerational-talks-about-the-family-business-and-wealth/#2ee4136f78e0[Republished with permission]
Actionable Generational Wealth Succession
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