We’ve noticed a growing trend among families as they plan their estates. Historically, the goal of most families has been to pass as much wealth as they can to their second and third generations. But views of generational wealth transfer are shifting in favor of thoughtful planning about how much – or even whether – to pass money on to heirs.
A study by U.S. Trust reports that fewer than half of wealthy parents think it’s important to leave money to their children. Their reasons include uncertainly that their children will be able to handle an inheritance, fear that children might become lazy or make poor decisions, or that outsiders might take advantage of their children.
We are seeing more families make the decision to give while living, rather than deferring responsibility to their children, and losing the opportunity to make an impact now. With these changing attitudes, there is more focus on preparing the next generation to be better stewards.
Some parents and grandparents are creating experiences, or defining moments, in an effort to pass on family values, before they pass on their valuables. Here are three ideas to help you prepare your children and grandchildren for wise wealth transfer:
- Start the conversation now: Your estate plan should not be a surprise when the will is read to your children after the funeral. Such a surprise could have a devastating emotional impact at a vulnerable time. You can start a positive discussion now about your family purpose, stewardship, and impact. Set aside regular times to dream together. Plan how your family wants to impact the world, and how you can give charitably to make that happen.
- Set an example: Be bold with your giving. The most powerful way your children and grandchildren learn is by watching what you do, not what you say. Are you modeling the generous habits that you hope to see in them one day? Do they see you giving your time, energy, and resources to causes you believe in? Make sure they have ample opportunities to join you in giving, so they can witness the actions first-hand that demonstrate your love for others.
- Give to your children, charitably: You can contribute cash or stock into your NCF Giving Fund (and receive a charitable deduction) that the children and grandchildren can use to recommend grants to charity while you are still here to guide them. Let your family members know how important this is to you. And be sure to listen to what causes are important to them.
To learn more about wise wealth transfer, or get help making a plan for your family’s giving, contact NCF.