facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
%POST_TITLE% Thumbnail

Skip Dines in the Denver Business Journal: Tips on talking to the next generation about your family’s wealth


Click here to view the original article on The Denver Business Journal

It can take decades of hard work, discipline, and a commitment to sound financial principles to be fortunate enough to accrue the level of wealth that will last your family for generations. Unfortunately, that precious sweat and financial equity can disappear at an alarmingly fast rate.

According to a recent study from the Williams Group family wealth consultancy, 70% of wealthy families’ fortunes evaporate after being passed to the second generation. Even more shocking, by the third generation, 90% of families will have lost their once-formidable nest egg.

Such stories of generational wealth transfer failure can usually be traced back in large part to one common and avoidable mistake: lack of communication between generations about finances and family principles.

Below are some communication strategies that can help put your family on the path to financial peace of mind.

Start simple and early

When your children are in their early to mid-teens, they don’t need to know the mechanics of your estate plan or the specifics of your investment portfolio. However, it is around this time in their lives that you should introduce them to the reality that the family has money, and make sure that they begin their journey to financial literacy with small, incremental steps.

Include your teenagers in discussions about budgeting for grocery shopping or vacations. Introduce concepts like loans and interest through simple lending activities. Ask your financial advisor if you can bring your kids in for a “meet and greet.” Such meetings serve as an opportunity for parents and children to talk in a neutral space where a financial professional can answer questions and offer a third-party perspective removed from the parent-child dynamic.

Build around financial literacy

As your children display increased knowledge of and discipline around personal finance, usually in their late teens or early 20s, they should be introduced to more complex topics like investments and financial planning strategies. This might involve exposing your children to the custodial or trust accounts in their names and including them in investment decisions in those accounts.

Additionally, have your children attend increasingly detailed meetings with your financial advisor. Giving them exposure to such meetings can help them understand the values underpinning the financial picture that you have worked so hard to paint.

As your children mature and gain experience handling their own finances, you can move on to preparing to disclose more about your assets and begin the conversation on inheritance concepts like wills and trusts.

Be truthful and share your values

Secrecy surrounding finances and inheritance can create distrust and infighting in even the most harmonious families. If you have established clear and open lines of communication about money early in your children’s lives, then revealing details such as asset values and estate plans should feel like a natural next step.

Being truthful doesn’t only apply to disclosing dollar figures. It also applies to sharing the values and stories that have helped you amass your wealth and how you wish for that wealth to be utilized after you are gone.

Discuss with your kids the adversity and challenges you and prior generations overcame that allowed your family to be in the fortunate position it is today. Hearing stories about years of hard work and sacrifices made to generate the family’s wealth can ingrain gratitude and inspire your children to protect the assets your family has accumulated.

In these conversations, you must express your intentions regarding the future of your wealth without trying to control everything after you’re gone. We find that this step, best facilitated by a meeting with the entire family and your team of financial professionals, is crucial to setting up a successful generational wealth transfer.

Don’t go it alone


Talking with your children about money, in general terms alone, can be difficult. Broaching the topics of death and inheritance makes those conversations even more uncomfortable. Unfortunately, complete or partial avoidance of these generational wealth conversations can cost you and your loved ones dearly.

But keep in mind, you don’t have to do it alone. Use your team of financial professionals to provide resources, expertise, and meeting facilitation. 

Reach out to our team today if you want to discuss our services supporting planning and family meetings.