3 Ways to Prepare Children For Their Wealth Inheritance

Parents often worry about the influence of wealth inheritance on their children. This is because children inheriting money are ill-prepared to manage it on their own. While knowledge and access to parent’s wealth can be a positive thing, there's always the risk of money leading to complacency and entitlement. A sudden windfall of wealth comes with a huge temptation to splurge, instead of intending to make smart financial decisions. Preparing your children for wealth transfer won’t happen overnight, rather it is an educational and emotional process that takes considerable time, and it must be an integral part of wealth parenting. Here are a few effective ways shared by professional family wealth coaches that will help you prepare your children to understand the value of wealth inheritance and how to use it smartly.

1. Facilitate Open and Honest Communication

The foundation of every relationship is trust, and it can only be shared when there is open communication. Parents often find it difficult to have a “sit-down” discussion about inheritance with their children, which is not good. There could be several reasons for that, maybe you are scared to introduce your children to a financial dimension that could affect the parent-child relationship. But, you need to understand that it is imperative to let them know what you think and how you feel about wealth transfer.

2. Incorporating Children's Interests

Sometimes parents owning significant wealth find it challenging to consider their children as responsible adults. In addition to expecting children to understand the value of family wealth, you also need to listen to what they are passionate about. You have to ensure that your children feel a sense of ownership for the family wealth. Maybe they have a passion for the arts, which may not be in-line with your future plans.

3. Considering family wealth coaching

If you find this process difficult, you should approach a professional family wealth coach. The coach can guide you for efficient wealth parenting and help in preserving the family's wealth while maintaining intergenerational harmony.

It is better to seek help from someone experienced with the intricacies of family wealth to prepare your children for the transition.