How Can Families Convey Values Along With Wealth?

This article was originally featured in Forbes.

As a successful business owner, your business is likely your greatest financial asset—one that serves as both a source of future capital and a foundation for generational wealth to benefit your family for years to come

You may also know that a massive wealth transfer is taking place between now and 2045, which is predicted to culminate in $140 trillion in family wealth being passed down between generations.

Those who have come before you and built wealth have traveled the path you are on now. They, too, have had to consider how to protect and preserve what you spent your life building—preparing those who will become stewards of your business, your wealth and your legacy.

It’s worth noting that many of the tactics you used to build a thriving business can directly apply to preserving your legacy as well.

Myths Versus Reality Regarding Generational Wealth

In our wealth management practice, we work with families who are negotiating their own transfer of wealth as first-generation wealth creators, as well as families who have multigenerational wealth. We have observed that:

• It’s a myth that younger generations aren’t philanthropic; they are incredibly impact-driven. What’s different is how and where they invest charitable funds. They are less likely to be concerned about putting their names on buildings and more interested in how they can put their contributions to work on solving systemic problems that have escalated during their lifetimes, including homelessness and access to healthcare.

• But it’s not a myth that younger generations find it easier to talk about money than their parents and grandparents. Whereas Boomers might still believe that it’s impolite to talk about money, younger generations are much more open, and they will likely pass that transparency on to their children.

The Best Businesses (And The Best Families) Are Better At Communicating

Research has revealed that over one-third of American families indicate they don’t plan to discuss inheritances; they will simply leave it to the executor of the estate to communicate the details.

It is a great idea for a drama-filled television show, but it’s not a good way to set your family up to protect and grow the wealth you worked hard to create, and it’s likely to set future generations up to experience the shirtsleeves-to-shirtsleeves phenomenon.

What if, instead, your family discussed the values that you bring to your shared experience? Would that create a more enduring and multigenerational legacy?

Help Those Around You See The Big Picture

We often host our clients and their families to hear from thought leaders about topics of interest when it comes to wealth, family and legacy, and we have noticed something striking. The closer our clients come to the time horizon when their wealth transfer is going to take place (i.e., as their children approach the age of inheritance), the more our clients are interested in talking not about money and investing, but about legacy.

As I looked around the room at one such event recently, everyone was voraciously scribbling notes as our speaker talked not about trusts and legal structures but about rituals, storytelling and conversations that create a family culture. This the part of legacy is not about money and investing, but about how their family will continue to thrive after they are gone.

Make 'Culture Eats Structure' Your Mantra

As the popular saying goes, "culture eats strategy for breakfast," a nod to the idea in business that the culture you create is more enduring than strategy, which is fleeting.

Noted family advisor Matt Wesley says that, for high-net-worth families, "culture eats structure." In other words, the values you instill as a family will do more to protect and grow generational wealth than an investing strategy or mindset. That’s why we encourage families—individually and collectively—to consider how they might introduce rituals and routines that nurture their desired culture.

Ensure That What You Have Built Can Scale

Family meetings bring culture to life, but they needn’t be stuffy boardroom affairs. If one of your family values is gratitude, and in that spirit, you seek to guard against privilege, consider a family trip to another part of the world so that younger generations can have their horizons expanded.

If your values include empathy and perspective, prioritize seeing the future through the next generation’s eyes by inviting younger family members to plan your family meeting.

Ritualize What Matters

Most of the best ways to pass down values don’t have anything to do with how you allocate your wealth. Consider the moment when a 13-year-old Girl Scout receives her citizenship badge and relates her years of service to her grandfather’s 40-year history as a Rotarian serving his community. This shared experience creates a shared value that becomes a thread through their relationship and lets her know, "I belong."

Speak Straight

We sometimes call conversations about legacy "courageous conversations" because they may bring generational differences to the forefront. It takes courage to start conversations about family culture because you are each bringing experiences and perspectives shaped by years of family dynamics to the table.

These conversations are at once intimate and universal. Don’t be afraid to bring your wealth advisor into your family’s circle of trust when it comes to legacy; you already trust them with your material assets, look to them for help managing these most precious assets of family and legacy.

Are You Part Of The 2%?

The great wealth transfer looks to be coming from about half of the top 2% of families in the United States, and with it will come implications that will reverberate throughout our society and our economy.

But whether or not your family is part of the great wealth transfer, you have the chance to create a legacy that endures, and the same advice applies: Consider your values your greatest asset; commit to creating a culture that is meaningful, fun and enduring.

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