John E. Chapman Chief Executive OfficerBy 2048, it is estimated that $124 trillion will be passed from one generation to the next in what is being called the “great wealth transfer” (ABA Journal, Jan. 2026). Baby boomers have amassed enormous wealth, much of which is earmarked for passing on to younger generations.
But is the next generation who will be inheriting much of this wealth prepared to be good stewards of the assets that they will be receiving?
Related to this thought, many parents will face the question: “When is the most appropriate time, and to what extent should we share the details of our wealth with our children?”
As parents, maybe you have been wondering how to address sensitive issues like this with your own family.
What are some of the primary issues for parents to consider?
Wealthy parents often struggle to inform their children of their wealth, fearing they might instill a sense of entitlement or complacency, thereby preventing them from being motivated to pave their own paths to success in life.
Some parents might also be apprehensive about rushing or oversharing information, fearing that early knowledge could lead to competitive attitudes among their children, who might be vying for a larger slice of the family “wealth pie”.
On the contrary, other parents might worry that delayed disclosure of family wealth will leave their children ill-equipped to preserve family assets, particularly in the event of an unforeseen situation in which the transition to managing the wealth occurs earlier than planned.
Striking the right balance for parents is crucial to ensure that younger family members are prepared to handle the responsibilities that come with managing family wealth. But the timing of a serious discussion about wealth and educating children is specific to each family, and because the dynamics of every family situation are different, there is no simple “one size fits all” answer.
Real Life Scenarios
What can happen when family wealth is not discussed?
A highly successful widow with both earned and inherited wealth has one child, her son. The son is a very good person who has demonstrated a strong work ethic throughout his life and is now considering retirement.
His mother has decided not to talk with him at all about what will happen upon her passing. In other words, the son has no knowledge of what will occur with his mother’s estate in the future.
The son thinks there will be either a significant windfall for him, a division of the estate between him and his mom’s favorite charities, or a situation in which all the funds from his mother’s estate will go to charity.
Even a brief discussion regarding his mom’s intentions and wishes without disclosing specific numbers or percentages would be very helpful to her son. The son is not only very confused about how he should proceed with his own planning, but the lack of trust his mom is showing in him has caused underlying stress in their relationship.
What can happen if family wealth is discussed?
A husband and his wife have provided a detailed breakdown of their assets to their adult children, along with their specific charitable intentions, which are very important to them. They are now including each of the children in decisions regarding a charitable entity that they have created, as well as including them in successor leadership positions of that entity after they are no longer around.
The parents feel that because of their consistent meetings where serious philanthropic decisions are made as a group, the family members have become much closer to each other. They also continue to learn about each other and the causes that are most important to each of them. The parents and their children truly enjoy their family meetings as they strive to make a positive impact in the world.
As illustrated in these two scenarios, the outcome can be vastly different based on whether the parent(s) disclose their wealth situation to their children. How that information is communicated and what details are shared with the children is also very important to consider.
Questions to Consider:
- Is there truly an “ideal” time for parents to start talking to children about the wealth that they will be inheriting?
The ideal time is well before an event occurs, such as a serious injury or death. Unfortunately, nobody really knows when that will occur. And even though a well-constructed estate plan will outline the legal distribution of your assets at that point, communicating with your family well in advance is what can really help to educate your children on the important qualitative desires you have regarding your wealth that documents cannot.
Having a simple, low-pressure conversation where you can share your values, hopes, and intentions can help to build an understanding with your children long before any money or assets are passed on. The sooner such wealth-related discussions take place, the easier it is for parents to convey the information to children.
What should parents and children talk about in the first family wealth conversation? Start small and touch on values-focused topics that might include the following:
- How you built your wealth and what shaped your financial values;
- What do you hope your money accomplishes for your children and grandchildren?
- How do you think about work, saving, and responsibility?
- Why do you support certain causes, such as philanthropic efforts, and why is that important to you?
- Should exact asset and monetary values be shared with the children?
Typically, this type of detailed discussion is not necessary, at least initially. What is most important is for you to provide clarity to your children on issues such as:
- What do you want your wealth to support?
- What you do not want your wealth to support.
- How should decisions be made regarding family wealth in the future?
- How can conflict be prevented between children after a death?
Although this is sometimes the most important hope for parents when they are no longer around, children who inherit wealth often do not honor their parents’ wishes. With that said, setting clear expectations for your wealth might help prevent future family conflict. Families can help to avoid disputes by:
- Making sure you communicate your intentions while you are still alive.
- Explain your reasoning behind major decisions regarding your wealth.
- Specifically document your intentions with the assistance of an estate attorney;
- Use appropriate wealth-transfer structures, such as trusts and beneficiary designations, to reduce ambiguity about your intentions.
With the importance of relationships in the family, and the importance of stewardship of family values and wealth, conversations can and likely should happen early and often. While it may seem difficult to get started, most folks are relieved once these important topics are “out there in the open” for discussion. And – you don’t have to start this alone.
Along with the expertise provided by your estate planning attorney, the Clearwater Capital Partners wealth advisory team has walked many families through these conversations and is available to help guide you through important family wealth transfer discussions, as well as to help translate your intentions and desires in a clear manner to your next generation.
Note: Nothing contained herein is offered as tax or legal advice. The real-life scenarios discussed are purely hypothetical and are not actual client cases.
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