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The Great Wealth Transfer: Communicating with Your Family

One of the most common questions among families who are transferring wealth to future generations is “How much should I leave to my children?” Experts say the answer is as much as they are prepared to receive.

Communication and planning are key when it comes to ensuring parents and their children are clear about wealth being transferred and how it will be used in the future. However, many families tend to avoid the topic of family finances even though they know it’s important. For some it’s an uncomfortable discussion that they may put off until it’s too late, which can have complicated results especially if one or both parents pass without leaving a will or trust.

When preparing heirs, each family’s circumstances will vary, but financial literacy should be a consistent and central theme. Helping the next generation to understand the value of money and the opportunities it provides may sound daunting but the earlier you discuss finances, the easier it will be to have conversations as your family grows. Then, when it comes to the topic of estate planning, it will just be a normal extension of your earlier conversations. 

When you begin conversations with your children, consider it a fundamental aspect of their education that will guide them toward independence and ensure that they handle the family’s financial future responsibly. These conversations can then progress to further educate them about saving, budgeting, and eventually an understanding of your family’s financial situation. 

When it comes to transferring wealth, a successful strategy will require mutual engagement—parents need to openly discuss with their children what they’ll expect to inherit, and children need to ask questions regarding their parents’ wishes—do parents want their wealth evenly distributed? Do they want some of it invested? Do they want a portion to go to causes they care about? Working with a trusted financial advisor can be helpful when answering these questions because they will have educational resources to share and experiences from previous relationships that may help inform the conversation with your family. 

Parents, in turn, should explain to children the “why” behind their decisions. This can help them be more intentional about the values and wisdom they wish to impart to the family. Through open discussions both parents and children can work together to make informed decisions about the future. For example, opening a Donor Advised Fund provides many benefits to families of wealth, including the ability to add next generation family members as successor advisors. Providing them with an active role in the family’s finances helps them to develop important skills as they experience the responsibilities that convey with wealth.

At the Community Foundation, we can facilitate conversations with you and your family when you are ready. We can also work with you and your professional advisor to help you create or update a plan for donating a portion of your cash and noncash assets to causes that matter most to you. Contact CFAAC Director of Gift Planning John Rodenhausen at to learn more and set up a free consultation.

This is the third article in a four-part series about the Great Wealth Transfer.


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