How to have family wealth conversations


Up to 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third, according to a 2018 study.1 One reason for wealth transfer failure is a lack of communication between family members – so if you want to make sure your family’s legacy and wealth live on, you’ll need to have quality conversations about it with those involved.

How to approach family wealth conversations

Setting a clear mission statement for the overall purpose of your family wealth is a great place to start. You'll want to clearly define the legacy and the impact that your family wants to have on society at large. It is crucial that all members of the family are involved in setting the mission. That way, everybody has their own incentives and opportunities, and the whole family is on the same page. If you have yet to inherit, broach the subject of a family mission statement with your parents and extended family so you can all be on the same page about your family’s purpose.

Transparency is key. Make sure all family members understand the structure of the family wealth and its different sources. Each family member should be fully aware of their role in managing the family wealth. Once everybody understands who’s making decisions and how, communication and collaboration typically improve.

Establish and hold periodic family meetings to talk about wealth, rather than leaving it to be discussed at random. Scheduled meetings give everybody time to prepare in advance, which helps things run smoothly. Make sure the meetings are held regularly enough to adapt and evolve with market cycles or estate changes.

Develop learning opportunities for all family members. Active mentorship and coaching, as well as through external training, can ensure that each family member is prepared for their role in the family succession plan as well as catering to different individual interests and needs.

Engage an independent party to help establish and monitor your family’s mission. This external party can help mediate disputes and bring an impartial point of view to the table.

Typical challenges in family wealth conversations

Money and feelings are never an easy combination and discussing wealth with your family will not always go smoothly. You might find that different family members have different aspirations, that wealth plans are outdated and inefficient, and that nobody agrees on how the estate should be split.

As challenging as wealth conversations can be, most issues can be addressed successfully. You just need thoughtful planning, open communication, and the right guidance.

Key takeaways:

To make sure that your family’s legacy and wealth live on, you’ll need to have quality conversations about it with your family – and sooner rather than later.

You’ll want to set a clear mission statement, be transparent, hold periodic family meetings, and create learning opportunities.

Conversations around wealth are never easy, but an external advisor may help smooth the process out.