Conflict, whether in families, businesses or nations, arises from unmet expectations; and money is famous for prompting expectations. Its presence alone can cause people, our children, and others to think of how it should be used and how they should participate. Conflict can emerge with even the appearance that these expectations will not be met. The key to avoiding this conflict is to bring expectations in line with reality. This is accomplished through effective communication, but the topic of money is often a no-fly zone.
Why We Don’t Talk About Money
1. Did our parents talk about money with us? If not, it is not likely we will naturally talk about it with our children.
2. We fear hurting our children. This is a natural concern. We think if the kids know they are getting a significant inheritance, it will rob them of a work ethic. Our unspoken hope is, if nothing is said, they will work and develop themselves as if it were certain there would be no inheritance and then, when it comes, it will only be a bonus.
3. Often we are too busy to make it a priority. “We will talk to them someday”, but someday never arrives.
While unmet expectations are a source of conflict, good communication is the key to harmony.
A Powerful Paradigm
What if rather than viewing an inheritance as simply leaving assets to our children, we view it as transferring a stewardship responsibility and opportunity to the next generation? If our children take over (to some extent) the stewardship of the wealth, it is a God-given calling. In this paradigm it is natural that wealth training is required. This context also motivates the child to develop themselves and foster ambition as they have an important role to play. Open discussions will promote these 4 outcomes:
1. Help them recognize their important role and their need to reach their potential.
2. Help them seek to optimize the use of family wealth.
3. Awareness of the opportunity to build a family legacy of people and wealth which goes beyond our generation.
4. Deepen family relationships with both generations, serving a common vision instead of competing for limited resources.
Open communication aligns expectations with reality, reduces conflict, positions our children for a much greater role than a “beneficiary” and deepens family relationships. Passing on healthy relationships is far more valuable and a much greater legacy than passing on a healthy investment portfolio.
Covenant Family Wealth Advisors' certified financial advisors and business succession planning experts help guide families through the technical and emotional aspects of managing wealth, estate planning and business succession. Our experienced financial management team uses a Christian perspective that is rarely found in traditional financial planning, and we work closely with you to develop a personal Holistic Stewardship Plan that encompasses financial planning, estate planning, family business transition and philanthropy.