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3 Key Considerations for Multi-Generational Planning

M Caton 2014
Maria Caton, CFP®, ChSNC®, AAMS®
Senior Vice President, Manager of Financial Planning Services - Team Leader
[email protected]
(585) 419-0670 x50666

The desire for heads of family to preserve and continue wealth for future generations face challenging odds. According to studies by Victor Preisser and Roy Williams, in their book “Preparing Heirs,” almost 70% of family wealth transference and business succession plans fail. However, it does not have to be this way. With proper planning and focusing on three key things—communication, documentation, and initiation—families can strengthen mutigenerational relationships and increase chances of continued family legacy.

The most essential factor to facilitating successful transference of wealth is communication. In order to have healthy conversations, a foundation of trust needs to be established. Ideally, it is advised to hold family meetings to facilitate these conversations. Ground rules should be established to ensure every family member will be listened to and that differences in opinions will not be judged. This applies not only to younger generations but for family leaders as well. When families create structured discussions with an agenda or predetermined discussion points, there is less chance of catching a family member “off guard,” as this allows family members time to process information beforehand.

Family conversations should be meaningful and include discussions on the values shared by the family as well as traditions and family history. Education is a critical component of the conversation. Education can take on many forms, whether it is basic financial literacy, an understanding of how family wealth is invested, a better understanding of the family business, or the philanthropic goals of the family. For younger family members, understanding their role and expectations for them going forward will help develop good stewardship of future wealth and less breakdown in communication and misunderstandings.

Family meetings have been an integral part of the Rockefeller family. Twice a year, all family members aged 21 and older, and their respective spouses, participate in the family meeting. According to David Rockefeller Jr., “The family talks about its direction, projects, new members and any other family news related to careers or important milestones. It’s important that everyone feel a part of the family, even if they married into it.”

Yet you need not be a Rockefeller to benefit from multigenerational planning. According to a Cerulli Associates study, “U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2018: Shifting Demographics of Private Wealth,” aging generations are expected to pass on $68 trillion in assets within the next 25 years. With notable inheritances to pass on to descendants, a real need for generational wealth planning exists.

In conjunction with the family meetings, it is important for things to be documented. I encourage families I work with to memorialize the key aspects of the family legacy. As time passes, it can be difficult to recollect information or stories that occurred years prior. Having it documented provides a gift for future generations to be able to share with their offspring.

Key discussion points should also be documented, especially related to estate planning. Estate planning documents include wills, durable powers of attorney, and advanced medical directives. Families have evolved from years ago to reflect a modern view of the family entity, including blended families from previous marriages. With that said, it is often desirable to have strategies in place to ensure family wealth flows the way the family wishes. Trusts can be an effective means to help facilitate desired estate planning outcomes. Trusts are also helpful with minor children, family members who need assistance with spending and budgeting, as well as those with disabilities or addictions. Lastly, a letter of instruction, which is not a legal document, can accompany a will to provide instruction and a reflection of personal thoughts and wishes.

Lastly, in the words of the behemoth footwear and apparel company Nike: “Just do it.” Yet as simple as this sounds, a small percentage truly give their children a full picture of what they stand to inherit. There are a variety of reasons for this, ranging from the anxiety of broaching the subject, determining the appropriate age to have financial conversations, not wanting to create entitlement, to the stigma of the discussion of death itself. The impact of not having the conversations can create negative consequences, such as family discord or even financial ruin in some circumstances.

Leveraging your trusted partners, such as your Wealth Advisor, Financial Planner, CPA, and Estate Attorney, can help structure and facilitate these meetings and conversations. Having guidance from professionals can help initiate difficult conversations, provide objectivity, and provide effective and creative strategies that are appropriate for the family’s specific situation.

With statistics revealing the dismal odds of passing family wealth on to generations beyond grandchildren, the importance of proper multigenerational planning cannot be over emphasized. It begins with conversations that encompass candid conversations around family values, goals, and objectives. By engaging in family meetings where education and honest dialogue can be conducted on a regular basis, the odds ever increase in favor of the family. Leaning on trusted advisors to help facilitate meetings and conversations, as well as developing a good estate plan, are crucial steps to making family wealth last.

Published on March 12, 2021 in the Rochester Business Journal. To see the full version of this column in the RBJ, visit

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Have questions about multi-generational planning? Contact me at (585) 419-0670, ext. 50666 or by email at [email protected].

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