Over the past few decades, social and technological changes have had a notable impact on family wealth management.
“Not so long ago, a parent’s bias may have been that a daughter couldn’t be the trustee of your estate,” says Allison Gregory, Wealth Advisor with Wells Fargo Private Bank. “Now, a son may choose to stay at home, and his wife or partner may be the family breadwinner.”
Here, Gregory and Kent Caldwell-Meeks, Senior Director of Investment and Fiduciary Services at Wells Fargo Private Bank, share advice for families on helping bridge generational gaps in decisions about family wealth management.
Take a moment to reflect before taking action
Gregory has seen that conflicting social values from generation to generation may lead to some very candid conversations. She encourages families to understand both sides before making any decisions. “More often than not, with time and understanding, I’ve found that preconceived notions change,” she says. “As a result, it’s important for decision-makers to reflect before making an irreversible planning decision.”
Prepare younger generations for rapid wealth creation
The potential for rapid wealth growth creates a unique set of planning challenges. “We’re seeing significant wealth being generated by younger generations, especially those in the technology field,” Gregory says. “Their net worth can move from negative to millions in a very short time frame versus their parents, who often built their wealth over a lifetime or even over several generations.”
The best response? For those young entrepreneurs to recognize the crucial role wealth planning plays—even at the launch of their businesses.
“For someone who has recently been more worried about paying the internet bill than looking ahead, it may seem strange to spend time creating a wealth management plan that includes gift and estate tax elements for themselves and their family,” Gregory says. “Having a plan in place also allows them to move on to the next project following a liquidity event.”