Imagine that your children wake up tomorrow and see their inheritance deposited into their bank account. Tomorrow. Not an undetermined “someday” in the future. Not decades from now. Gone are the years that you thought you would have to share more about the decisions you made, why you made them, and your hope in leaving them a financial legacy.
Would they know what to do with it? Would they understand the heart and story behind it? Would they be prepared to steward such a meaningful blessing?
For many of the new clients I meet with, how to prepare their adult children for an inheritance is one of the concerns that keeps them up late at night.
Even with an updated and thoughtful estate plan in place (something far too many American adults lack), a set of legal documents and a team of professional advisors can’t possibly convey your values, hopes, fears, successes, setbacks, and lessons learned. Only you can do that with the most precious resource of all: your time together.
Here are three simple steps to get you started:
1. Let Them Make Real Financial Decisions
Responsibility is a gift and an incredibly fertile training ground. There’s no better way to predict how your children will treat a future inheritance than giving them a small test amount to work with today. Making good decisions about money is far more about practice than innate skill. By creating opportunities for your adult children to make meaningful financial choices that you can observe, you can experience their decision-making process in real time. If they make sensible choices, great! Keep going to help them build and sustain a rhythm. If they encounter challenges or make ill-conceived decisions, you still have time to identify those skill gaps and take steps to improve together. Here are a couple ideas from clients I am working with:
- Invite adult children into family generosity decisions. Give them an amount to donate to a charity of their choice. Have a conversation about what they chose and why.
- Give adult children a modest dollar amount to help with a specific goal: making a dent in a high-interest credit card balance, paying off a small car loan balance, buying a new furniture set if they are remodeling their home, paying for their kids’ braces or extracurricular activity registration fee, and so on. Adult children can learn financial responsibility by carrying financial responsibility and making real-world decisions about money today.
2. Share the Story Behind Your Wealth
Your children may already have a vague idea of the wealth you have created. They are observing how you are stewarding it in the way you live your life. Perhaps you have been more open about the state of your family finances, though this is somewhat rare in my experience working with clients. Regardless of your current communication pattern, there is a good chance that your children do not fully understand how you built the wealth you have today. So you should talk about it.
Avoiding these conversations disconnects the inheritance that your children will one day receive from the effort and sacrifices that you made over decades to create it. Connect those critical dots by sharing your story, and I’m not talking about balance sheet numbers or investment returns. Instead, it’s the stories about your:
- Career setbacks, challenges, and failures
- Business risks that did and did not pay off
- Financial mistakes you made the hard way
- Difficult decisions that required discipline
- Major turning points, whether planned or by pure luck or circumstance
Consider sharing these stories both in conversation and in writing. A letter to your children can be magic! When stories and wealth connect, adult children have real context, rather than gaps filled in by their imagination.
3. Hold One Intentional Family Conversation Each Year
Many families spend more time choosing the restaurant for a family dinner than discussing their hopes for the future. While you don’t need a formal family board meeting at a professional office location with a three-page agenda that follows Robert’s Rules of Order, you do need to do something. Starting simple is always best. Choose a regular family gathering that already exists and add an hour or two for a meaningful conversation. (Don’t try to fit it in on Super Bowl Sunday.)
Some questions or themes for your discussion could include:
- What values shape us as a family, and what do we want to be known for as a group?
- What opportunities and successes have had the greatest impact on our lives?
- How can we use what we’ve built to help others in need?
- What responsibilities come with our blessings?
- What do we want our grandchildren and great-grandchildren to learn from us?
In my experience working with multigenerational families, a few open-ended questions can be the start of something incredibly meaningful. These conversations focus far more on what family wealth is meant to accomplish and who your adult children will become as stewards, not what amounts or assets they will one day receive. Though it may feel awkward or unfamiliar at first, that’s totally normal and to be expected any time you try something new. Keep at it each year for best results, and you’ll soon see an encouraging rhythm emerge.
The Real Measure of Success
Your legacy is about far more than the assets and wealth you leave behind. It’s about how you help prepare your children and future generations for what comes next. To make your wealth a blessing for future generations, start giving your children opportunities to make decisions, start sharing the stories behind the money, and start creating space for meaningful family conversations. Ready to begin? Connect with us today to start the conversation and take the first step toward preparing the next generation.
