Inherited wealth doesn’t come with inherent understanding. Those attitudes and approaches must be taught.
By Whittier Trust
There are two families with nearly identical balance sheets. Both have carefully structured estate plans and appear equally prepared to successfully transfer wealth to the next generation.
Yet 20 years later, their outcomes look remarkably different. One family’s children work confidently with advisors, make careful financial decisions, and continue building on the legacy they inherited. The other family’s children struggle with uncertainty, conflict, and disengagement.
“The difference isn’t the estate plan,” says Amanda Buntmann, Vice President and Client Advisor at Whittier Trust. “It’s whether the family prepares the next generation for the responsibilities of wealth and involves them in generational wealth planning. They may have spent decades accumulating wealth, but if they fail to educate their children about it, it can be challenging to catch up later when the kids are grown and funds are being transferred. By then, attitudes, values, and assumptions are already set. It’s always a smoother process to begin earlier, rather than later.”
The Risk of Silence for Next-Generation Wealth Planning
Parents worry that discussing money too early might create entitlement or unnecessary pressure. And adult children often hesitate to ask questions for fear of appearing ignorant or presumptuous about the inheritance. Everyone assumes there will be time later.
But when conversations about family wealth are delayed until an inheritance, a health problem, or the loss of a family member, it’s not fair to expect the next generation to absorb years of financial complexity all at once, during a stressful time.
“You can’t build confidence under those circumstances,” Buntmann says. “Whereas families who normalize conversations about money and wealth stewardship throughout life create a familiarity with the topic. They remove the mystery and intimidation.”
Instead of waiting until children become beneficiaries or trustees, families can gradually invite them into age-appropriate discussions and decisions. A younger child might decide how to divide birthday money between spending, saving, and giving. A teenager might help evaluate charitable donation opportunities or participate in an investment simulation. A young adult can attend meetings with advisors or serve on the board of a family foundation or donor-advised fund. Within this supportive environment, each experience contributes to the ability to make mistakes, correct course, ask key questions, and demonstrate mature judgment. This kind of involvement is a vital piece of financial education for wealthy families.
Wealth Stewardship Starts with Simple Conversations
Trusted advisors can play an important role throughout a young person’s journey by explaining financial principles and governance, facilitating family dialogues, and helping create opportunities for rising generations to engage with increasing responsibility.
“At Whittier Trust, bringing families together to understand each member’s role in wealth stewardship is an intrinsic part of what we do, and it always begins with goals, not account balances,” says Buntmann. “One of the biggest misconceptions about preparing heirs is that transparency is all about how much money you have. In reality, the most meaningful conversations often have very little to do with numbers. They have to do with values.”
Some of the questions Whittier encourages families to discuss include:
What opportunities does this money give us?
What responsibilities come with these financial resources?
What do we hope our wealth makes possible for not only our family but others as well?
Beginning with values gives context to future financial decisions. It reminds younger generations that wealth is not simply something to preserve, but a tool that can open doors, strengthen communities, and reflect the family’s shared purpose.
The Role of Advisors in Generational Wealth Planning
Some families don’t have a lifetime to prepare the next generation, however, such as when a significant financial windfall changes everything virtually overnight. This is when, more than in other scenarios, having trusted advisors can make all the difference.
“One of our clients recently had a massive liquidity event,” Buntmann says, sharing an example. “The oldest of their three children had worked with the dad in the family business for years, but the other two had chosen completely different career paths. They had all grown up in a modest home and were now trying to wrap their heads around how their lives would be changed by a significant cash infusion. We held a family meeting and a day later, the youngest daughter called to say, ‘I’m really overwhelmed by this and just don’t know what this is going to mean for me and our children.’ We assured her we would be with her the whole way, checking in to make sure she felt comfortable at every turn.”
In addition to guidance on their investment portfolios, the Whittier team ensured that the whole family received financial literacy training, together and as individuals. “Family retreats are a comfortable and non-intimidating way to facilitate that education,” Buntmann says. “They naturally lead to conversations about family history and continuity and preparing the next generation. In the case of this particular client, that discussion led to their decision to create a family foundation.”
In the case of this particular client, that discussion led to their decision to create a family foundation.” A family foundation offers entry points for all ages and generations to get involved, and it naturally sparks conversations about generosity, legacy, strategic goal-setting, and the family’s role in the community.
“Whittier Trust’s personal touch really helped this client family get acclimated to the full range of financial topics and possibilities that came with their new wealth,” Buntmann concludes. “Our growing familiarity has removed any nervousness, so everyone feels free to ask the questions they most need answered and to express individual preferences for things like whether they want monthly or quarterly portfolio check-ins or just an occasional phone call to touch base.”
Whether wealth comes on suddenly or has been built over centuries, taking time for the whole family to understand its complexity is crucial. With the right guidance, even bystanders in the family become participants, and participants become decision-makers. And when shared values are at the heart of those decisions, a family can be united in their answer to the ultimate question: What is the goal of our wealth?