It’s inevitable, so why are you holding your children back?

Published on 26/06/2025

Is it ok to assume everything will be fine? Or should you take the steps to ensure it truly will be when you pass on?

Technically you are all set, you’ve created an estate transition plan designed to control how your legacy is to be distributed over time, ensuring that when the wealth you’ve built finally does make its way to the next generation, they will be ready to accept it and the responsibilities that accompany it. But providing insight today into how, how much, and when, you intend to distribute your wealth to your heirs just might risk entitlement, laziness, or a distorted sense of your family values in the future.

It’s a common fear: giving your children transparency into your financial picture could prove to disincentivize them to go out and make their own impact on the world. In fact, a large proportion of family leaders feel that bringing the next generation into the conversation before they are “ready” would pose the greatest risk to ensuring that their financial legacy would have a positive impact on their heirs.

In actuality, research conducted across families of significant wealth in the United States found that 70% of estate transitions fully did fail into the next generation (failure being defined by estate litigation, a breakdown in family unity, depletion of capital, or a loss of self-confidence or quality of life cited by heirs) and 90% fail by the third generation. [1]

But, what was the real leading cause of these breakdowns? [2]

A breakdown in trust and communication across generations was cited in 60% of cases;
A failure to prepare heirs was noted 25% of the time.
Technical issues, such as tax planning, proper documentation, or poor structuring accounted for less than 5% of poor estate transitions.

In other words, despite excellent technical preparation across the scope of family advisors (no doubt at considerable costs), the lack of communication within the family as well as inadequate education of the next generation were the overwhelming factors that resulted in estate transition failures.

Layering onto the lack of communication is also a divide in perception: a report from Campden Wealth and BNY Mellon Wealth Management revealed that 85% of next-gen family members feel that they were “either very or somewhat prepared for transition of wealth and responsibilities” …whereas only “39% of family offices believed next gens are adequately prepared for succession.” [3] The sources of breakdowns can be numerous. So how does one build trust within a family framework when such divides exist?

What does success look like?

For most families, a successful estate transition is characterized by continued family unity, a strong individual and collective sense of self-worth, and a financial or business legacy that continues to provide opportunities and comfort for subsequent generations.

Typically, the glue that binds these elements is a shared family vision, or an agreed upon set of values which provides the framework for family interaction and decision making. Coming together to frame a collective vision as a unit helps build a foundation of trust, communication, and confidence, which are key elements in helping ensure that the family unit can continue to function through difficult emotional transitions and build into the future.

It’s paramount these family values be collectively determined and adopted. A unilateral imposition of values from the current generation only serves to create more alienation within the family. Allowing all members of the family the opportunity to articulate and participate in the process means building consensus and creating a more solid foundation for collective decision making into the future.

How does one engage family heirs?

Engaging heirs early in the management of the family’s financial assets serves as a training ground for the technical skills that will be needed later on. Understanding how the family’s assets are structured, how pools of financial capital are managed (and why), and who the key advisors are, all serve to pave the way for continuity down the road. Engagement and rapport building with technical advisors also builds knowledge and confidence.

While building technical expertise is one of the primary reasons for engaging the next generation, the act of involving heirs also builds a framework of trust and collective decision making, which are critical elements of determining success down the road. If siblings can develop these skills and embrace a collective vision now, the odds that they will continue to work closely into the future increase significantly.

Where does one start?

Part of estate planning should include bringing the next generation into the conversation today. Keeping children out of the conversation risks sending the message that you lack both trust and confidence in their capacity to understand the full spectrum of your affairs, or their ability to accept financial responsibility.

Fortunately, families today have a breadth of support options available to them to help navigate the complexities of a family enterprise strategy. Family advisors can offer a wide range of expertise to coach families through self-discovery, provide a constructive framework for conflict resolution, and help keep all family members engaged and accountable.

In the end, investing in your family today will help maximize the odds that your legacy will be a positive force in the future.

Created by the Institute for Preparing Heirs, the Wealth Transition Checklist[4] provides an indication of the odds of a successful estate transition relative to families who have identified themselves as having had successful transitions in the past.

Answering in the affirmative to seven or more questions suggests high odds of success; less than three affirmative answers correlates highly to situations where estate transitions failed, often resulting in outright conflict across family members and/or wealth depletion.

Our family has a mission statement that spells out the overall purpose of our wealth.
The entire family participates in most important decisions, such as defining a mission for our wealth.
All family heirs have the option of participating in the management of the family’s assets.
Heirs understand their future roles, have “bought into” those roles, and look forward to performing in those roles.
Heirs have actually reviewed the family’s estate plans and documents.
Our current wills, trusts, and other documents make most asset distributions based on readiness, not heir age.
Our family mission includes creating incentives and opportunities for our heirs.
Our younger children are encouraged to participate in our family’s philanthropic grant-making decisions.
Our family considers family unity to be just as important as family financial strength.
We communicate well throughout our family and regularly meet as a family to discuss issues and changes.

Discussing the statements listed above and engaging in constructive conversations with your family can help ensure preparedness and stability for your legacy’s future, and your family’s future success.

[1]The Williams Group, ” Generational Wealth: Why do 70% of Families Lose Their Wealth in the 2nd Generation?“, october 2018.

[2]The Williams Group, ” The williams Group Family Readiness Assessment™ “.

[3]FERRIS, Glen. In Campden FB, ” Next-gen report discovers a generational disconnect in succession readiness “, december 2022.

[4]WILLIAMS, Roy and Vic Preisser, ” Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values ” , p. 57, 2004.