How to Begin Wealth Discussions with Your Children — Susan Schoenfeld
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Susan R. Schoenfeld, CEO and Founder of Wealth Legacy Advisors LLC, serves as a ‘thought partner’ to families of wealth through personal attention and human spirit. Susan is an award-winning Thought Leader; she provides guidance on legacy, next-generation, stewardship, governance, leadership succession, and philanthropy. She recently spoke on Family Governance and The Family Office: Planning for the Next Generation at Opal Group’s Family Office Forum West in Napa, CA.
Parents often ask me how to get started having wealth discussions with their children.
One of the most gratifying family meetings I ever facilitated was one where the parents wanted to teach their three high school-age children that there would be a safety net for them, even if they didn’t want to follow in their parents’ career footsteps.
In that instance, both of the parents worked in the investment industry, and all 3 of their children were artists; one was an actor, the second was a film student, and the third was a musician. The parents’ message essentially was, “Even though none of you are never going to be a captain of industry, we will support you in your endeavors. We want to encourage you and we want to share some details about our estate plan.” The parents didn’t share all the details, nor did they bare their family balance sheet, but rather they wanted to let their children know that there would be a trust for them so that they could pursue their dreams. The caveat was that the children had to actually pursue their dreams, whether the arts or otherwise. As long as they were the best actor, filmmaker or musician that they could be, the parents’ plan would support them.
Philanthropy was an important value in this family. We created a Family Foundation, and the children were all named to the Family Foundation Board. We used that technique to start teaching these young adults who are not financial people the basics about how to work with their managers, how to review the wealth management reports, how to participate in meaningful conversations about investments, and to start engaging in family values exercises. That is one technique that works well if philanthropy is part of your family value system.
Another technique to engage the younger generation at their current level of interest and understanding is to create a Junior Advisory Board that can participate in the family governance system. It might be comprised of teenage or young adult siblings and cousins who aren’t yet mature enough to have a formal vote in family matters, but may still bring different ideas and perspectives. Give them a voice and encourage them to actually participate in those conversations.
I just did that with another family, also a philanthropic family, and we set up a junior advisory council to advise and make recommendations to the foundation board on causes that matter to the younger generation. I got the foundation board members to agree to fund the junior advisory council’s grant recommendations. This empowered the younger family members, and led them to approach their grant recommendations thoughtfully.
The critical piece to engaging the younger generation is working within their current level of interest and maturity to capture their attention and give them a sense of engagement in the family’s governance system.
Susan Schoenfeld, a public speaker & thought partner to families of wealth and their advisors, is an award-winning thought leader. Susan’s switch from successful estate planning attorney and CPA to a trusted family advisor and thought partner was inspired by families of wealth asking her searching questions beyond estate tax planning. As a conflict-free advisor who provides no investment, tax, or legal advice and sells no product, Susan shares her insights directly with wealthy families and with financial services experts. She is active as a keynote speaker and a leader of break-out sessions and workshops at conferences throughout the US.
Connect with Susan Schoenfeld on LinkedIn.
