6 Strategies for Successful Wealth Transfers

By Brad Harvey on March 12, 2024

We all know — or even belong to — a family that has suffered from conflict following the death of a loved one and a “change of control” in family assets. This outcome almost always runs contrary to the deceased’s hopes and intentions for the wealth they worked hard to steward during their lifetime.

Why is this such a common outcome? How can families prevent it? Answers to these questions are becoming increasingly important as more than 70 million baby boomers approach the later stages of their life and begin passing an estimated $60 trillion to their heirs.[i]

Although every family is different, here are some strategies designed to promote family unity and lead to more successful wealth transfers.

1. Engage in Philanthropy Together.

Research shows that sharing in philanthropy can bring families closer together — provided they actually share the experience rather than the older generation dictating it. For example, Fidelity’s Center for Family Engagement refers to this shared approach as “practicing peership,” whereby families resist default hierarchies, including parent-child, to allow for two-way communication flow as family members share where and why they seek to make an impact.[i] Often, this starts with parents and grandparents recalling their past and sharing the experiences that shaped them and led them to the causes they care about. This helps engage the younger generation in ways that only storytelling can.

Likewise, the younger generation can open up about what they care about, how they see the world, and what’s important to them. When both sides truly listen, they become more interested in the other side’s causes and often find overlap, creating a shared philanthropic purpose. Sometimes, this leads families to become involved in the same causes. Occasionally, it simply allows them to be more supportive of each other as they pursue their goals. In almost all cases, it helps families bond through storytelling and shared purpose, making them less vulnerable to conflict. 

2. Create a family mission statement.

Another helpful approach for creating shared purposes — and greater unity — is a family mission statement. A family mission statement seeks to capture your family’s purpose, goals, and values. And just as with shared philanthropy, it works best if it reflects contributions from the entire family, including the younger generation. This means listening to each other, being open-minded, and finding common ground that motivates everyone in the family. The statement does not need to be long. Nor does it need to be formal. You can write it together around a campfire, in the car, or lounging on the couch. You can frame it or simply put it on the refrigerator. And it can be as simple as, “Work hard, seek adventures, and act with kindness.” You can also take more formal approaches to integrate your family mission statement further with your estate planning documents. It doesn’t have to be perfect. The most important thing is to engage in the exercise — and do it together.

3. Communicate your intentions to your loved ones.  

More often than not, estate plans are communicated to family members posthumously. This opens the door to unresolved questions about the deceased’s intentions and whether they are being properly carried out, often leading to resentment and lasting conflict. Having a dialogue can prevent this outcome. To do so, bring your family together and share your plan for your assets and, most importantly, the philosophy behind the plan. These conversations can be tough to initiate, but they pay off by preventing conflict and facilitating intimate conversations that allow families to communicate unspoken feelings and understand each other better.

4. Communicate your intentions to your attorney.

Sharing your intentions — not just how you want to allocate your assets — with your attorney can also help preserve family unity. It can lead to more appropriate provisions in your trust and will. Don’t forget your attorney is a “counselor-in-law.” Suppose you step back and share your overarching goals (e.g., supporting children in impactful but underpaid professions, balancing your desire to care for your children without spoiling them, avoiding conflict between them and your spouse). In that case, your attorney can counsel you on the estate planning techniques and language that best align with those objectives. For example, trusts can have a wide range of distribution standards ranging from emergency use only to the trustee’s sole discretion. If your attorney knows your end goals, they can help you choose the most suitable standard for your family’s situation. Simply defaulting to commonly used standards —such as health, education, maintenance, and support — may not align with your intentions or your beneficiaries’ expectations.

5. Communicate your intentions for personal property.

Even in the wealthiest families, the smallest items — a coin, a clock, an antique plate, etc. — have been known to tear people apart. In one family, a medal given by a stepmother to a stepchild with nothing but the best intentions after her spouse passed away led to the demise of the stepchild’s relationship with her sister and both sisters’ relationship with their stepmother. The sentimental value of such items should not be underestimated. It can be addressed simply by including a memorandum of personal property in your will and communicating your desires to your loved ones beforehand.

6. Choose objective fiduciaries.

When selecting those individuals responsible for executing your estate plan — most notably, your trustee(s) and estate executor — you may tend to default to a family member based on what seems like reasonable criteria, e.g., the eldest child, a lawyer in the family, a family member who is particularly good with numbers, etc. However, these decisions don’t always consider family dynamics or the individual’s capacity constraints. Naming your eldest child to make distribution decisions impacting their younger siblings can cause bickering. Naming your attorney daughter, who is already short on time, to settle your estate may cause her to feel resentment toward a sister who moved out of state. Consider such dynamics before naming your fiduciaries, and decide if naming a completely objective individual or corporate entity could be the right solution for your family.

Family dynamics are complex and powerful yet often significantly underrepresented in estate planning discussions and decisions. Conversations often default to wealth transfer’s less complicated, more quantifiable aspects. This is one reason many know families who are torn apart when money changes hands.

As holistic financial planners who care about our client’s well-being — not just their net worth — we can collaborate with you, your attorney, and other advisors to help you build and communicate a plan that appreciates and values the unique forces at play in your family. Please get in touch with us for help building or revising your estate plan.

[i] Habbershon, Timothy, Dr., Donath, Tobias, “Navigating the Decade of Generational Wealth,” Fidelity Investments, 2022.

[ii]Habbershon, Timothy, Dr., Donath, Tobias, “What charitable giving can give your family,” Fidelity Center for Family Engagement, March 1, 2022, https://www.fidelity.com/learning-center/wealth-management-insights/multigenerational-family-philanthropy. Accessed July 1, 2022.