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Creating a Family Legacy: The Conversation You Need to Have

Involving the whole family in wealth planning can improve relationships and help you build a lasting family legacy. Here's how to make it happen.

Image of three generations of family who make financial decisions together.

It used to be that wealth planning and the creation of a family legacy were left in the hands of the older generation, and younger family members had little or no say in the matter. Today, the situation is changing.

“I’ve seen a really significant change in families recognizing the rising generation’s need to be heard,” says Katherine Dean, Head of Family Dynamics for Wells Fargo Private Bank. “If you don’t create that forum for them to share new ideas and values, they feel left out.” And that lack of inclusion left the next generation feeling disconnected from the family’s plans and values.

Dean and other financial experts say taking a more inclusive approach with your children when it comes to finances can lead to improved family harmony and more purposeful planning.

Here, Katherine Dean, Lloyd Kurtz, Head of Social Impact Investing, and Beth Renner, National Director of Philanthropic Services, offer their tips for successful family conversations that can lead to a lasting family legacy.

Define your family’s values first

Dean: Historically, families didn’t always take the time to articulate their values. But when we go through a process to make them explicit, it leads to shared purpose within the family, as well as more collaboration.

Kurtz: Younger generations have more of a stake than they had before. Today, people want their kids involved sooner, as it creates continuity and a shared mission. (Learn more about social impact investing at “Doubling Down: Using Social Impact Investing to Help Amplify Your Philanthropy.”)

Renner: Simply put, the younger generations may agree with the same original values of their family’s philanthropy but not agree on how the resources are deployed. This can be frustrating in families with multiple generations engaged in the family’s philanthropy. However, with discovery conversations and the development of an intentional giving plan, families often come through this process more unified on their philanthropy and with a more comprehensive giving plan.

Discuss what gets you energized to give

Dean: We all have different lenses we see the world through, and thanks to social media, people today are more expressive about their views. One of the things we work with our client families on is this notion of “it’s OK to have different opinions and viewpoints. It’s natural and innately human.”

Kurtz: Today, major public events (positive or negative) create a surge in interest and can galvanize a client into action, where they want to come talk to us about what’s gotten them energized.

Renner: Entrepreneurs often apply their entrepreneurial spirit to their philanthropy. We recently spoke with clients who are concerned about low-income communities that have little or no access to a grocery store or sources of fresh produce. Instead of giving money to a food bank, they decided to open a business focused on providing access to healthy foods and educating people on how to grow and cook fresh produce. Younger generations may also want to actively see the impact of their giving. For example, if they gave to a clean water initiative in a village [in a developing nation], they may want to go online and see how much water it’s providing today.

Pass on what you have learned

Kurtz: Fostering trust for everyone through collaboration is important. We all—families and advisors—need to be better listeners. It seems like common sense, right? But hearing and responding to needs is what leads to successful family meetings and cohesive wealth plans. One of the challenges we run into is the difference in financial knowledge across family members. Sometimes you’re in a room with one who wants to know the Sharpe ratio of the portfolio, and right next to them sits someone who has no idea what that means. Our goal becomes meeting both of them where they are so everyone can get something of value out of the discussion. (Learn more about having meaningful family conversations about wealth in “5 Wealth-Planning Best Practices That Can Improve Your Family Relationships.”)

Dean: It’s all about practice, practice, practice. If you’re trying to create muscle memory, you have to practice the techniques we teach. New ways of learning to communicate about wealth may not feel natural at first for everyone. But the more you practice the dialogue and keep an open mind to possibilities that can emerge, the easier things become.

Renner: We often find having conversations with different generations creates common ground around the purpose of giving. You’re talking about things that are inherently good, and that positive energy builds trust.

What can Wells Fargo do for you?

Creating a plan for every generation of your family can be a challenge. Schedule time with your team to get started.

Wells Fargo Wealth Planning Center, part of Wells Fargo Private Bank, provides wealth and wealth planning services through Wells Fargo Bank, N.A., and its various affiliates and subsidiaries.

Wells Fargo & Company and its affiliates do not provide legal advice. Wells Fargo Advisors does not provide tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.

All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results, and there is no assurance that any investment strategy will be successful. A portfolio’s social policy could cause it to forgo opportunities to gain exposure to certain industries, companies, sectors, or regions of the economy, which could cause it to underperform similar portfolios that do not have a social policy. A socially responsible investing style may shift in and out of favor.

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