For many inheritors, the desire to honor family traditions while also carving out their own space can be a delicate balancing act. Family traditions are meant to bring families closer, but many inheritors also want the chance to blaze their own trail. And in some cases, they are looking for an outright departure from old habits and communication styles.
How can inheritors find their own way while being mindful of the older generations who built the wealth they’re inheriting?
Why the Hesitation?
It’s common for generations who have created wealth to feel apprehensive about how inheriting will impact future generations. In our proprietary research, Wealth Beyond Measure, we conducted deep, one-on-one interviews with 40 UHNW Bernstein families at different points in their wealth journey. As participants from around the world opened up, several expressed fears of the unknown as they contemplated what the rising generation might do.
Despite this trepidation, many families fall back on informal discussions when it comes to tackling sensitive issues—including hopes and fears. In fact, two-thirds of families in our study relied on informal channels when handling wealth-related matters. Pulling someone aside has its place. But other tools are also available to help families navigate these complex dynamics. Below are some effective ways for inheritors to carve out their own space while keeping peace in the family.
Family Meetings: A Platform for Open Dialogue
One powerful tool for fostering open communication and understanding within a family is the formal family meeting. Consider the case of a family that faced a critical moment in their legacy planning. The two siblings running the family enterprise had no children who expressed interest in working in the business. As they began to consider succession, they were unsure whether to bring in professional management or sell the company. They hoped to keep the business in the family but felt stuck since they had never discussed the matter with their children, leaving an information gap when it came to the future.
The siblings decided to call a formal family meeting around the holidays with two goals in mind: educate the family on key aspects of the business (e.g., business units, key employees, dividend policy, major decisions) and provide an open forum for questions and feedback. To get started, they mapped out an agenda, determined who should attend the meeting, and brought in a third-party facilitator to help guide this new endeavor.
The siblings were delighted to learn of the family’s wishes when it came to the business. As one of the siblings put it, “There wasn’t much deviation [in] our meeting with the family—we should keep the business going, but in a simplified way whereby we get rid of the frills. We get rid of some things that are very long-term, and that’s something the family felt we should do. But it doesn’t appear that there will be a [member of the family] in the office managing the business 10, 15 years from now. At this point, we’re continuing on that assumption.”
By opening up, the siblings discovered that the family aligned on retaining key divisions of the business. They would build out a professional team to take the business forward while divesting other divisions to generate liquidity for family members. As this example shows, having formal family meetings can create a space for everyone to talk openly, making it easier for families to make informed decisions that reflect the collective will.
For families that have formal boards and committees, or philanthropic pursuits, these meetings can also serve as a platform to engage rising generation family members. By involving them in these areas, families can leverage the skills and fresh perspectives of younger members. This, of course, requires clear communication and a structured approach to ensure that everyone is aware of the opportunities and how they can contribute. Engaging the rising generation in such meaningful roles not only helps them develop their skills but also strengthens their connection to the family’s legacy and values.
Crafting a Values and Mission Statement
Another effective tool that allows inheritors to gracefully break from tradition? A values and mission statement. For example, one family we spoke with needed a “north star” so that everyone could understand what they were trying to achieve as a family. Crafting an aspirational vision statement and putting it on paper helped the family make tough decisions regarding their philanthropy.
In this instance, the passing of the family patriarch marked a significant transition for the family foundation. Previous generations had each run the foundation according to their own mission and vision. The surviving son was now tasked with articulating his view, knowing that it would impact several organizations that were important to his father and relied heavily on the foundation’s funding.
Observing the dynamic, one family office professional noted, “He’s really begun to think about how we relate to the world—both here and universally—and it’s had a really big impact on the work that we do. We’re using [this time] to really facilitate meaningful discussion around the foundation’s vision, and that may very well include a significant change in funding. Right now, there’s a lot of demand to tap the corpus. Before his father’s passing, he was prepped and is now fully primed of the need to course correct. It’s not a subtle shift in funding, it’s a hairpin turn. Put your seatbelt on.”
Working closely with the family office, they drafted a clear vision statement to establish an aspirational goal and a corresponding mission statement that outlined the foundation’s objectives and how they planned to achieve them. With the values, vision, and mission crystallized, the family was able to push forward on their action plan. This involved setting expectations for future grants with organizations that were supported before, looking into new causes, and figuring out a spending plan that would keep the foundation going strong for the long term.
Honor Traditions While Making Them Your Own
As families deal with these complex dynamics, it’s crucial to be understanding of everyone’s concerns about opening up and sharing different opinions. Open communication helps us understand each family member’s goals and worries. By creating a space for dialogue, families can make everyone feel included, respected, and heard.
Inheritors have a special chance to respect family traditions while also finding their own path. Tools like formal family meetings and creating values and mission statements can help with open communication and understanding. By being empathetic to the concerns of those who created the wealth and encouraging open dialogue, families can handle the complexities of wealth inheritance and build a legacy that reflects everyone’s hopes and dreams.
- Anne Bucciarelli
- Senior National Director—Family Engagement Strategy