Top 5 Conversations to Have with Your Kids about Family Wealth
Let’s face it, talking to your kids—even when they’re all grown up—about touchy subjects can be tough, and money can be one of those subjects. Glenmede recognizes the challenge inherent in communicating with your kids about family financial matters, but urges you to maintain an open dialogue on the subject of family wealth if you want to build a bridge between generations.
1. Talk about the past.
Whether great-grandpa Forrest built a candy-coated chocolate empire or great-aunt Ruth took the toy world by storm with a little blonde doll, relaying your origin story allows your children to appreciate the efforts of those who struggled and sacrificed to create the wealth your family now enjoys.
2. Demonstrate your principles.
An understanding of your family’s core values will inform the next generation’s decisions surrounding the use of family wealth. Shared charitable, educational, or entrepreneurial values can unite future generations in deploying family wealth to promote women in STEM careers, provide scholarships to at-risk youth, or seed a Kickstarter campaign.
3. Give them (and model) financial responsibility.
Have the kids save part of their allowance each week to buy their first shares of stock, or require them to start an IRA with some of last summer’s tips… they seem like trivial lessons, but by educating your children from a young age with respect to financial responsibility, you can engender a lifetime of conscientious fiscal practices.
4. Now, talk about the future.
Engaging the next generation in setting short- and long-term family goals encourages their contribution in attaining them and can preempt the conflicts that can arise when teamwork is required. Well-known names like Prada might not mean anything to us today if not for generations of each family coming together to outline and achieve their collective goals.
5. Get ready to let go.
Hard to believe, but at some point, they’re on their own. Acknowledging the next generation’s role as the family’s future decision makers allows the process of transitioning wealth and responsibility to ensue, with your guidance and involvement.
We’re here to help families navigate difficult conversations and other transitions. If you have any questions, please contact your Relationship Team.
Glenmede’s Top 5 is intended to be an unconstrained review of matters of possible interest to Glenmede Trust Company clients and friends and is not intended as personalized investment, estate planning, tax or legal advice. Investment and wealth advice depends on many individual facts and circumstances we cannot account for here. For legal and tax advice, consult your lawyer or accountant. Opinions or projections herein are based on information available at the time of publication and may change thereafter. Information gathered from other sources is assumed to be reliable, but accuracy is not guaranteed. Outcomes (including performance) may differ materially from expectations herein due to various risks and uncertainties. Any reference to risk management or risk control does not imply that risk can be eliminated. All investments have risk. Please contact your Glenmede representative to discuss the applicability of any matter discussed herein.