Having a financial plan for and educating your family is generally the best way to assure that your family will be able to sustain its wealth. But less than ten percent of families are able to sustain their wealth through the fourth generation.
In our latest “Wealth Matters” episode, we sat down with two special guests from Truist Wealth: Natalie Smailes, Senior Vice President & Managing Director, Center for Family Legacy and Vice President and Trust Advisor Michael Covington. They suggest that communication and education are the best ways to sustain generational wealth, even among families that will never be excessively wealthy. Yet, many families tend to avoid conversations about money.
In our discussion, we highlight ways to bring your family members into the conversation.
Giving Your Children the Tools to Sustained Generational Wealth Through Financial Literacy
Giving your family the tools to sustain familial wealth starts early with financial literacy. Regardless of your family’s wealth, every child will benefit from the knowledge to make responsible financial decisions, and it’s never too early or late to start. Natalie Smailes points out that less than twelve percent of schools offer any financial literacy courses, and therefore, the responsibility will likely fall on the parents. Teaching children concepts such as investing, financing, and lending will benefit them, as well as their future generations.
It’s important to note that those raised in the same household with the same teachings will likely walk away with different ideas and habits surrounding money. This is natural, and having diverse and new ways of thinking about money could benefit your family.
Open and Frequent Communication Maintains Generational Wealth
Even though understanding finances is an essential part of understanding how any individual family operates, most parents, regardless of wealth, are hesitant to talk to their families about their finances. Michael Covington laments that families are not more open about this, and even mentions that some families refuse to let their spouses know how much money they make. However, open and frequent discussions about finances can help older or adult children walk through the process of making financial decisions. Natalie states that children look at everything we do, including how we make, spend, and save money. Open conversations foster good habits.
When it comes to open communication, there is more to discuss than just numbers. Michael suggests that the core of these conversations should be the crafting and sharing of personal and familial values. Once families have an understanding of their own core values, they can work as a unit to enforce and improve their collective growth. The guest speakers suggest being intentional about these conversations by scheduling and keeping meetings that include all family members across generations.
Avoiding Trust Disputes
Michael Covington and Natalie Smailes agree that it is important that a child not rely solely on their trusts to sustain their finances. Sustaining wealth requires that funds continue to grow. Educating heirs in financial literacy, while having open conversations about the family’s assets, will help to avoid financial mistakes in the future. .
We Can Help with Trust Disputes
If you find yourself in a dispute with your beneficiaries, call our law office at 404.892.9797 or fill out our contact form. We offer free consultation, in which you can speak to our experienced litigation team.
Gaslowitz Frankel LLC is the Southeast’s premier fiduciary litigation law firm. Our legal team specializes in all aspects of fiduciary disputes with over 30 years of experience representing individuals, executors, trustees, and more in complex fiduciary disputes involving wills, estates, and trusts.
