Time to read: 3 Minutes
We’ve talked about strategies for passing down generational wealth effectively. When that is all determined, the question that many people have is how can I make sure my family members use this wealth wisely? The simple answer is, you can’t. Once the money has been transferred, it’s out of your control.
However, there are things that you can do to make sure you’re passing on your habits, values, and intentions, alongside your money.
Creating a family mission statement
Preparing the next generation to manage wealth responsibly and, ideally, with your values in mind, starts with clear communication. If your family doesn’t know what your values are, how you’d like them to use the money, or best practices for managing it wisely, how can they be expected to follow through?
We recommend creating a family mission statement that outlines their shared values, purpose, and expectations for how wealth should be used and grown, and what can be done to help preserve it for future generations. The mission statement doesn’t need to be long – but it will serve as a guiding framework for decision-making and helps keep everyone aligned.
Thoughtful planning
After the mission statement, and guiding framework, has been creating, thoughtful planning allows you to dive into further details. Explaining how assets are structured and why, sharing your financial mindset, and explaining the importance of goal-based planning helps your heirs understand why thoughtful planning matters and how they can create intentional financial plans.
This is also a great time to introduce them to your financial advisor, if you work with one. If your heirs don’t have a financial advisor already, working with a trusted partner who is already familiar with how your finances are structured as well as your values can be extremely helpful as they navigate next steps
Intentional family engagement
Many families hold annual family meetings, which bring together multiple generations. During these meetings, they’ll review the family’s financial position (in as much detail as they feel comfortable with), discuss long-term goals, reaffirm the mission statement, and make sure everybody is on the same page. These meetings are a great opportunity to give updates on any changes to your estate, educate your heirs, and begin an open dialogue.
Intentional family engagement is also important in that it removes much of the stigma around financial conversations. It makes your heirs more comfortable asking questions, gives opportunities for ongoing financial education, and improves financial literacy.
Establishing family traditions
Leaving a legacy is about more than what assets you leave behind. It’s about the meaningful impact you make on your family and community. Many families choose to create or commit to meaningful family traditions. This could be charitable giving, community service projects, foundations, shared celebrations, and more. These family traditions likely shaped your family members as they grew and will continue to shape the younger generations. They reinforce your values, strengthen family unity, and create purpose just as much, if not more, than your financial legacy.
Thoughtful preparation, especially when coordinated with trusted advisors experienced in multigenerational wealth planning, can help your entire family feel confident for what comes next. Your family will feel secure, knowing that they understand not only what your estate is, but how they should use it and what legacy you’re trusting them to uphold. Meanwhile, you’ll feel confident that your heirs are capable stewards and will help to preserve, and grow, what you’ve built.
All securities through Harbour Investments, Inc.. Member FINRA / SIPC. Investments are not FDIC/NCUA insured. No bank or credit union guarantee. May lose value. Harbour Investments, Inc. is a Registered Investment Advisor with the SEC. The Tranel Financial Group is an independent firm not affiliated with Harbour Investments, Inc..
Note: This content is for informational purposes only and should not be considered financial or tax advice. Please consult with your financial or tax advisor for guidance tailored to your specific situation.