Preparing the next generation for wealth

Proper planning is an important part of passing on wealth to the next generation. Responsibly managing a significant legacy often requires education, guidance and shared expectations.

Financial education and clear communication of your goals can help support a legacy that reflects both financial success and personal values.

For many families, few things are more meaningful than knowing their wealth can provide opportunities, such as access to education, flexibility in career choices or long-term security. However, when wealth is transferred before the next generation is prepared, outcomes may not align with the original intent. Without education, guidance and shared values, inheritances can introduce complexity rather than opportunity.

This planning takes on added importance in the years ahead. An estimated $84 trillion is expected to transfer from Baby Boomers to younger generations, while charitable organizations and philanthropic causes may receive between $12 trillion and $18 trillion, as part of the Great Wealth Transfer¹. Thoughtful preparation can help ensure the next generation is ready for both the opportunity and the responsibility that comes with inherited wealth.

Start to educate about money and values early

Parents are a child’s first teachers, and early exposure to age-appropriate financial concepts can help establish healthy habits that support next generation wealth over time. Simple lessons around earning, saving, spending and giving tend to resonate most when they are reinforced by example.

One teaching method is to provide each child with three piggy banks: one for charity, one for personal savings and the third to spend. It’s a good lesson that you can’t spend everything you have. During adolescence, progressively larger allowances can be tied to jobs around the house or volunteering. A good way to communicate is by example. If your kids see you making careful, deliberate spending decisions, they’ll be more likely to adopt that behavior.

Philanthropy can be an excellent teaching mechanism, especially when practiced as a family. For families with private foundations, involving the children and even letting them choose some causes to research and support can instill a sense that wealth involves responsibility for others. And consider donating time as well as money. Volunteering together can help develop a sense of shared purpose, and it communicates the importance of living according to your values.

Learning from mistakes is also an important part of financial development. As children and young adults begin managing more of their own money, allowing room for small missteps can foster accountability and resilience that become especially important later in life. 

Establish your own legacy goals

As you teach your children financial responsibility, think about your own legacy, the amount and how you’re planning your wealth transfer, both during your lifetime and in your estate. The more specific you can be, the better. For some parents, a legacy means entrusting the next generation with significant funds from the time they reach adulthood. For others, it may mean help with education, buying a house or starting a business and delaying outright inheritance.

For some families, clarity comes from tying gifts or bequests to positive milestones or demonstrations of readiness. This might include completing education, starting a career or showing the ability to manage financial responsibility over time. Not every beneficiary, however, may be prepared to manage wealth at the same stage of life, and planning is often tailored to individual circumstances. Once goals are defined, families can explore strategies designed to reinforce those intentions.

For example, a trust might provide access to assets only after certain milestones are reached. At the same time, attempts to over-direct life choices or outcomes can have unintended consequences if they conflict with a beneficiary’s personal goals. Finding the right balance often means emphasizing core values such as education, independence and responsibility, while allowing flexibility for the next generation to follow their own paths.

Communicate your family wealth strategy

Once your goals are in place, clearly communicating your family wealth strategy becomes essential. How much detail you share may depend on your comfort level and the age of your children, but open communication can help reduce misunderstanding and conflict over time. While these conversations may not always be easy, silence can create challenges later, when intentions are no longer clear.

Family conflict often arises when heirs are left to interpret decisions without context. Formal family meetings can be an effective way to share values, expectations and long-term plans, particularly as children mature and take on greater responsibility. Many families find value in revisiting these conversations periodically, as personal, financial and family circumstances evolve.

A trusted advisor can help families prepare for and facilitate these discussions. By serving as a professional and neutral presence, an advisor can help keep conversations focused, support productive dialogue and ensure discussions reflect both financial goals and family dynamics.