Conversations To Have With The Next Generation, Right Now

You’ve invested a lot of time and energy into your wealth management plan.

• You’ve built a trusted team of professionals to advise you on both personal and professional matters.
• You regularly review your portfolio with your financial advisor to make sure your investments are aligned with your short- and long-term goals.
• You have a business succession plan in place.
• And, you’ve thought through your wishes for eventually transferring your assets to your family and community.

But, have you communicated these plans to your loved ones — specifically your children and grandchildren? Do they understand your intentions? Do they know your wishes?

Discussing wealth with future generations is important, but often overlooked. Whether it’s lack of time, comfort, or know-how, conversations with future generations are put-off or, worse, never happen. However, talking with children and grandchildren about money and wealth is just as important as having an actual family wealth plan in place. Not only does it help prepare your loved ones to better manage the eventual transfer of wealth, but having honest and open conversations can also help strengthen your relationship.

Below are important conversations to consider having with children and grandchildren to help them understand your intentions and prepare them to assume family wealth management responsibilities in the future:

Money Management 101

You may want to start by having conversations with loved ones around how to manage money and wealth. This includes basic skills such as getting paid what you’re worth, effective budgeting, the importance of saving and investing, and the pros and cons of taking on debt. These principles aren’t limited to a one-time conversation, but instead can be introduced and then referenced and reinforced over the years.

Discussing general money management practices will help future generations build a foundational understanding of wealth management and prepare them to eventually inherit — and successfully manage — assets in the future. In general, the earlier you can start these conversations, the better. However, consider what timing makes the most sense for you and your family.

Wealth Management Is A Shared Responsibility

As you know, managing your wealth is an important and ongoing responsibility. It requires time, effort, and diligence — not only from you, but from other members of the family. Talking with future generations about the role they play in the family’s wealth management plan can help them better understand the responsibility they share and prepare them to successfully assume that responsibility in the future. Additionally, your willingness to discuss the importance of having a sound wealth management plan helps model the importance of this responsibility to younger generations.

What Your Intentions Are For Your Family’s Legacy

Beyond the basics of money management and the shared responsibility of family wealth planning, it is important to have conversations with future generations regarding your intentions for the family’s assets. The goal of these discussions is to create alignment on core family values around how to spend, save, and invest assets. By helping loved ones understand your vision for the family’s legacy and allowing them to ask questions, you can encourage open communication, understanding, and trust.

The Importance of Establishing a Trusted Team

Wealth management is very personal experience and requires mutual trust between the family and their partners. While you may have managed the relationship with your team of advisors up until this point, it is beneficial for your family to be introduced to key team members well in advance of any eventual wealth transfer.

This team will facilitate the wealth transfer process to the next generation, simplifying and streamlining the experience of the family and serving as a guide for heirs as they assume the wealth management responsibility. Facilitating introductions early on can help ensure children and grandchildren have access to knowledgeable, trustworthy partners throughout the wealth transfer process, ensuring they feel supported and equipped as they assume these responsibilities. Partnering with a team that understands your vision also allows your children and grandchildren optimize plans and strategies in a way that aligns with shared family and business goals.

At Entrust Wealth Partners, we understand that as important as these conversations are, they can also be difficult. If you have questions or would like support in facilitating conversations with your family, we’re more than happy to assist. Simply reach out to your advisor for more information.