Key Takeaways

  • Sustaining wealth over generations requires intentional planning; it’s not likely to succeed if left to chance.
  • With purposeful planning, communication, and actions, future generations can gain a sense of stewardship and gratitude for their inherited wealth.
  • Three strategies can help families foster an ecosystem where generational wealth is understood as both a great advantage and a responsibility.


For many families, wealth can create prosperity, opportunity, and success. However, the advantages wealth can bring may also create trepidation about the future generation’s sense of responsibility and gratitude for that wealth. “Lack of purpose or ambition,” “entitlement,” and/or “self-indulgent” are often heard in conversations with wealth creators. Some families worry that the very financial resources intended to bring a legacy of happiness, resiliency, and productivity to their heirs will, in fact, be disempowering, damaging, and destructive.

Sustaining wealth over generations is not likely to succeed if left to chance. Rather, it requires purposeful planning, communication, and actions.

How do you create a sense of drive and grit, accountability, responsibility, work ethic, and purpose for heirs when it comes to inherited wealth? While the answers depend on the respective family structure, dynamics, and focus on stewardship, we suggest three general tenets to help families foster an ecosystem where generational wealth is understood as both a great advantage and a responsibility that allows for a family legacy to be sustained for generations to come. Those tenets are: (1) Inspire a link between family values and purpose; (2) Create a culture of preparedness and education; and (3) Nurture a philanthropic mindset.

Inspire a link between family values and purpose

A muddled sense of purpose often results in a lack of a stewardship towards family wealth. One of the most effective ways to develop, communicate, and instill an awareness of family purpose and legacy is through a family wealth mission statement (FWMS). The process of creating of a FWMS helps families collaboratively navigate key decisions, reduce friction, and facilitate a family approach to wealth stewardship.

A FWMS knits together a unified view on the efforts, struggles, and forces that went into creating the family’s wealth, the advantages and challenges of sustaining that wealth, and how the wealth should be managed and directed for the benefit of both today’s and future generations. It’s a roadmap that provides future generations with a unique perspective into the family’s heritage and stated value systems that may help create a true sense of purpose within themselves.

To help foster these conversations, families may find it helpful to envision their wealth in four core categories:

  • Wealth values: How would you like the family to continue to build and manage its wealth?
  • Philanthropic values: How would you like to see the family engage with the community?
  • Interpersonal values: How should family members behave toward each other?
  • Operating business values: If there is a family business, how would you like to see the family engage in and with the business in the future? How will the family make decisions going forward? How will they deal with differences of opinion?

Creating a well-constructed FWMS is important, but it’s the open dialogues during the process of creating the document that have the greatest impact. It is not a one-and-done exercise. A FWMS should be reviewed annually and continually fine-tuned to help ensure every generation has an active role and is able to create an emotional connection to the past, a clear and purposeful mission for today, and a sense of stewardship toward the future.

Create a culture of preparedness and education

Benjamin Franklin is often attributed with the saying, “An investment in knowledge pays the best interest.” This remains true today as we have found that families who thrive for generations support a culture of preparedness and education.

A culture of preparedness and education should inspire future generations to have not just strong financial literacy skills, but also aligned values and principles that enable them to lead engaged, fulfilled, and meaningful lives with a healthy attitude and respect for wealth.

Creating a culture of preparedness and education through generations is an ongoing practice from childhood through adulthood. It incorporates both simple teaching moments to more formal and focused educational programs.

Simple teaching moments can happen in a variety of circumstances and are usually part of everyday conversations and activities. Typically, these are the moments that can lead to short discussions on choices, conflict, responsibility and independence, gratitude, delayed gratification, and giving back. Having a well thought out, age-appropriate approach to these conversations can help guide the conversations in a nurturing and helpful manner.

But remember, as the saying goes – actions speak louder than words. It’s important to take a step back and reflect on your own modeling and behavior. Are the values you are trying to instill well reflected in your own attitudes and behavior? Are they the organizing principles of your family life, relationships, and experiences? The money messages and lessons we hear as children and young adults, as well as the behavior we witness within the family, influence life-long decisions on spending, managing, and giving wealth.

More formal and focused education can be done within the family or with the help of institutions, advisors, and other third parties. The degree of sophistication and formality of these programs depends on the source, structure, and magnitude of the wealth, the complexity of the family, and the respective family members’ ages, abilities, roles, and responsibilities.

Topics can start out very broadly to build a base of financial knowledge, and then over time develop into more customized programs that reflect the intricacies of the family’s overall wealth management and transfer plans, as well as the psychological and social aspects of being an heir and a steward of family wealth. The amount of in-depth information shared regarding family net worth and circumstance may be dependent on the age, maturity, and status of each family member.

Building a strong knowledge base over time, giving your heirs tools and techniques to have answers for tough questions in social situations, and preparing them for the responsibility of stewardship is a legacy that can be shared with generations to come.

This is a process, and future generations should be exposed to the family’s values and gain a sense of awareness as soon as appropriate. However, it is never too late to start a conversation and impart a culture of preparedness and education on heirs.

Nurture a philanthropic mindset

A philanthropic mindset is one that cannot be built overnight. It takes determination and focus from senior generations. It is a combination of parental modeling, robust discussion, effective education, and integrated involvement. We believe that these dynamic proactive conversations can enhance family harmony, connectedness, and a sense of individual and family purpose.

A first step to having children internalize a philanthropic mindset and a foundational awareness and appreciation for their situation is to engage them in simple charitable traditions. It can begin when children are very young by enabling them to make a tangible connection between their actions and impact. Discussing why they think it is important to do charitable actions and how it makes them feel can create opportune moments to highlight concepts such as values, gratitude, and empathy.

As children age, encourage them to find volunteer opportunities that suit their interests and talents. Talk about what might interest them, what they are passionate about, what challenges they see in the world, and some ideas for how to solve them. Encourage them to explore different organizations and the ways they can make an impact in their community. Giving older children the freedom to choose the best fit for them will increase the odds that they’ll feel connected and committed to a philanthropic mindset.

Moreover, it is a best practice to have children gain experience with the process of actual gifting. Have them research nonprofits and make recommendations for funding. Helping them engage in a process of due diligence and gain a sense of organizational factors to be aware of is imperative. Consider using third-party instruction or advisors to assist with any challenging conversations. Bear in mind that donating funds to charities is easy, however donating wealth wisely takes intention, astuteness, and effort. Therefore, if you have a philanthropic plan in place, it is essential that the next generation understands the different ways to gift, the purpose of different earmarked funds and charitable vehicles, and the roles and responsibilities of each. For example, if the family has a charitable remainder trust, a donor advised fund, and/or a private foundation, the heirs should understand the intended purpose, investment strategy, and gifting strategy of each. In addition, a robust and meaningful family giving dialogue on the “why” of the structure and the choice of charitable organization may create an enriched generational bond and understanding.

Bottom line

Every family has their own unique history, set of relationship issues, communication styles, and value systems. There is no one right way to foster an ecosystem where generational financial wealth is regarded as both a wonderful advantage as well as a responsibility.

Having a clear understanding of your family’s collective values and nuances, adapting a thoughtful and purposeful approach to managing wealth, and having ongoing honest dialogue can help each family member create an emotional connection to the past, a clear and purposeful mission for today, and a sense of stewardship toward the future.



Susan Hirshman, CFA®, CFP®
As Director, Wealth Management, SWA, SCFR, Susan serves as wealth management strategist and thought leader to help activate portfolio and wealth management plans and strategies with clients. She served previously with Schwab and other wealth management firms as an advisor to high-net worth and ultra-high net worth investors.
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