Life’s journey is predictable in many ways, made up of pivotal moments when having a solid family view on your core values and wealth is crucial. But even though we know these moments are coming, most people do not plan for them. Why? Because talking to family members about the wealth you have can be daunting—fraught with unspoken expectations, hidden assumptions, and generational differences. However, these conversations are crucial to shaping and ensuring the future of your family's financial legacy. They can also help strengthen family bonds and prepare your family for future challenges. We’ve pinpointed six common inflection points—transitional moments that many UHNW families go through—and offer effective strategies to guide you.

#1. From Innocence to Adolescence

This transition usually happens sometime between the ages of 11 and 14. Children start to grasp the concept of differing circumstances and realize that their family's wealth sets them apart. Parents often put off the conversation, worried that kids will act entitled or spoiled, but kids are perceptive and can see the differences. I worked with a client when I was CEO of a wealth management firm, and he told me that one day he was driving home his 13-year-old grandson and two friends from school. When they got to the grandfather’s house, the two boys turned to the grandson and said, “Wow, you must be really rich!” The grandson was completely flustered and didn't know what to say because he his family had never talked about it. When the boys asked what the grandfather did for work, the grandson answered “Well, he doesn't really do anything.” The grandson had no idea of the countless hours and sacrifices the grandfather had made to build his business; all he saw was the wealth. Addressing your family’s wealth and being open early on is vital. You do not need to get into all the details, but it's essential to convey that wealth isn't simply bestowed upon kids, but is the result of values, a lot of hard work, and sometimes luck. You can say something like, “We've been incredibly fortunate, and we've worked very hard to achieve the success we have. We also believe it's our responsibility to give back to others and support others who are not as fortunate.” For kids this age, or even younger, parents can also initiate discussions about financial responsibility by putting in place simple activities like allocating allowance for saving, spending, giving, and investing.

#2: From Adolescence to Independence

As children transition to independence, especially during college years, they face the challenge of establishing their identity apart from their family's wealth. They grapple with questions of whether people like them for who they are or for their family's status. This is something parents should address with kids before they go to college. It’s an opportunity to set guidelines and talk about common situations like friends expecting them to pick up the bill or be invited to events. It’s also common during this period for kids to feel what we call the “big shadow syndrome,” where they look at what their parents have achieved and feel insecure about their own abilities. Parents can support their children by reinforcing individuality, discussing personal definitions of success, and setting clear expectations regarding career paths and achievements. Kids often go off to school and a pick a major because they believe it’s what they're supposed to do based on the family’s success. The key thing is to address are the unspoken expectations—or even the spoken ones. Is it expected that your child will take over the family business? Set their own career path? Your child’s idea of success may be very different from yours. The measuring stick is not to live up to your success, but to make sure your kids work hard, are passionate about what they do, and give their best effort to whatever they choose.

#3: From the Bubble to the Real World

Graduating from college or entering the workforce marks a shift from the sheltered environment of education to the realities of adult life. Parents need to prepare their children for financial independence, emphasizing the importance of hard work, initiative, and integrity. I had one family where the father asked me to talk to his son about his future plans. The son said, “Well, I'm going to go work for the family business, learn from my dad, and in a couple of years I'll take it over.” When I shared this with the dad, he was shocked, saying, “What? We don’t have a job for him!” Clearly there was a miscommunication there that needed to be addressed. During this stage, families should sit down and talk about whether family members will be involved with the running of the family business/family office. If your child is going into the family business, establishing family employment policies and guidelines can promote a meritocracy within the family and clarify expectations for future involvement. Are kids expected to work elsewhere first to gain experience? Are they required to get a certain level of education before joining the family business? This should all be discussed together. Parents should also discuss what they will pay for during this life stage. Is the child responsible for their apartment rent? Living expenses? Tuition for education? Laying out the details give the child a clear guideline as they launch into independence.

#4: From One to Two

As the next generation reaches adulthood, discussions about marriage, the role of spouses in managing the family’s wealth, and prenuptial agreements become pertinent. Parents should set clear expectations well beforehand. A client came to me and told me his 28-year-old son was getting married in two months. The father asked me if I would talk to the son about a prenuptial agreement. The bride had her dress, the venue was set, the wedding was happening, but the family had never taken the time to have the conversation about money. Inevitably spouses and significant others enter into families, and the family should set expectations years in advance regarding prenuptial agreements and the role spouses will play in managing the family wealth. Conversations around prenuptial agreements often happen last minute and people wing it. The situation can turn ugly when the family member getting married is asked to discuss the prenuptial agreement with the spouse to-be. The easiest solution is for the parents to take the lead saying that they require a prenuptial agreement, or the child will not inherit the same amount of wealth. This takes the pressure off the child and puts it on the parents. Better yet is for the family to have a family meeting every year or a few times a year to talk about issues like prenuptial agreements, lay out the specifics, and discuss any obstacles or issues.

#5: From Two to Four

So now the next generation comes along, and grandchildren change everything. What expectations do you want to set up for the next generation planning-wise? How and when do you start to prepare them? How does this change the family dynamic? Does this change the role of the spouse who married into the family? If you’ve created a family environment where you have been having family meetings and discussing issues all along, when you get to this point you will already have a plan in place. If not, a few things you’ll want to address are: Will the grandchildren have trust funds? If something happens to the spouse who is the family member, is the surviving spouse and children provided for? What are the expectations around the grandchildren’s education? Having a written family communication plan is crucial. The more you address the specifics involving the grandchildren and how you will disseminate information to the whole family, the better.

#6: From Owner/Operator to Elder

t’s not uncommon for wealth creators to often define themselves by what they do—it becomes a big part of their identity—so letting go of the reins can be hard. However, it is crucial for ensuring the continuity of the family’s legacy. An issue I see over and over is that this transition happens way too late. The founder of the family business stays beyond their capacity, so family members need to step in, or a line of succession has not been set in place, so the younger generation gets frustrated that they have not been given control. It can turn ugly quickly. I am a big believer in the concept of wealth stewardship—that managing wealth is a journey not an event. Stewarding wealth means setting a plan in place and teaching throughout the journey. It’s not “one day I’m going to retire and on that day, you are going to take over the company I built and I am going to give it all to you.” It’s really about involving the younger generation in the decision-making process all along the way and providing small opportunities for them to succeed and to fail and to have your tutelage. It’s much more fun to be a mentor and work together on projects then then to just hand over the reins. The other part of this step is helping the owner/operator establish what’s next on their horizon before that time comes. Having a personal plan in place can take away anxiety about changing roles. Sometimes that means getting involved with philanthropy or immersing yourself in a big project you’ve been putting off, or maybe staying involved with the family business as the chairperson of the board. Anticipating this stage and being proactive about what you’d like to do next can take pressure off of you and how you see yourself.

Conclusion

Navigating conversations about family wealth requires proactive communication from the start, clarity of expectations, and a commitment to fostering a culture of transparency and collaboration. Ignoring issues just makes them more difficult to deal with. By addressing each inflection point thoughtfully and openly, families can lay the groundwork for long-term financial success and harmony across generations.