Personal legacy planningGenerational family wealth: Bridging the values gap

Families with significant assets often want to know how to best prepare the next generations to navigate the world of wealth – to both embrace the benefits and understand the unique challenges.

Creating an effective family education program begins with understanding how younger family members view family wealth. These views often fall on a continuum:

• Those who are too generous with their friends and/or reckless in making friends represent one end of the continuum. They run the risk of falling into a trap of entitlement, believing the money is theirs and will always be theirs. A lack of redirection or guidance can result in careless overspending and running up debt.
• Those who are conflicted about the family’s wealth and want to hide it from friends and co-workers represent the other end of the continuum. Although they may enjoy the luxuries that wealth brings, being associated with that wealth, as well as the word “wealthy,” can make them feel awkward or even offended. They’re also susceptible to being taken advantage of or unaware of how much they’re giving away to charity.
• In the middle of the continuum are those who have a positive relationship with the family’s accomplishments and related wealth.

The best place to start engaging and educating family members of all ages and attitudes toward money is with what matters most: values.

The link between values, behavior and maintaining generational family wealth

Our core values guide our behavior. We become easily offended when our core values are not respected. However, since our core values are often subconscious, we may not always be living up to our expressed values. We also don’t readily access them or articulate them when making decisions or taking actions.

If someone is conflicted about money and has a negative reaction to being known as wealthy, one of their core values is at stake. Before you can begin to talk about or instruct about money with them in a meaningful way, you need to know what that value is.

The best place to start engaging and educating family members of all ages and attitudes toward money is with what matters most: values.

The same holds true for someone who overspends and doesn’t make good decisions for saving or investing. Clarifying which of their values are driving their uncontrolled spending or lack of understanding about the importance of saving is essential before beginning a conversation about budgeting and wealth stewardship.

3 activities for multigenerational families to reveal shared core values

Values-based activities are designed to reveal a family’s shared core values and help everyone understand what drives the family in terms of making money, investing money, saving money and giving money away.

Following are three favorites that leadership and legacy consultants at Ascent Private Capital Management^® of U.S. Bank often use with clients.

1. Family history cards

Family history cards use a combination of images and questions to elicit conversation and exploration of where family values originated.

This activity facilitates meaningful storytelling that helps family members understand what motivated past behaviors. It also moves families toward more open dialogue about what has shaped the family’s current values.

Family history cards in action

• In one family, the cards gave a daughter an opportunity to ask her mother questions about her mother’s childhood growing up in three different countries – something her mother had never talked about in any detail.
• In another family, a father shared stories about his experience of growing up destitute. He vowed to make sure there would always be more than enough money for his family so they would never lack anything.

2. Money paths

During this activity, family members each draw a map of their most powerful experiences with money — from their earliest memory to the present day. They then share their map with the rest of the family through guided facilitation.
As the stories unfold, connections are revealed between the choices made and the values that generated the initial behaviors, allowing individuals to see how their core beliefs and values relating to money were formulated.

Money paths in action

• A woman remembered how, when she was nine years old, she would sneak an additional thirty-five cents from her mother’s change purse. Along with her twenty-five cents for milk, she would use it to buy her favorite treat at school. She recalled how hurt and upset her mother was after discovering that she had been knowingly taking more money than her mother had allowed. She saw how that breach of trust affected her mother, and that caused her to develop a belief that it was wrong to not only take from others, but that it was also wrong to ever want more for herself at all.

She realized how her conflicted relationship with money started at that young age; however, after the facilitator reassured her that ninety-nine percent of children engage in similar acts of petty theft as part of normal child development, she was ultimately able to overcome the guilt she had felt for decades. Once free of the negative emotions stemming from her childhood experience, she subsequently had greater comfort addressing issues of wealth.

3. Values clarification

This activity uses a color-coded system of “values” cards, providing families with an easy and enjoyable way to clarify and articulate their personal values. They get to view the colorful “values pyramid” each family member creates for a vivid snapshot of themes and priorities that matter most in the family. It also provides a visual representation of potential groupings of shared values.

The values-clarification process often surprises families with how transformative it can be for relationships with each other and with money.

Values clarification in action

• In a family where the mother had a contentious relationship with her adopted daughter, they discovered that they shared many values with similar priorities; they just had different ways of expressing those values.
• In another family, a mother’s top core value of “beauty” gave her family members a better understanding of what drove her relentless desire for order and tidiness and how unnerving even a little clutter could be for her. There was a new respect for her value that helped her family be less reactive and helped them articulate their boundaries and needs in relationship to hers. Their overarching value of “family first” made it possible for them to change their way of relating to one another to allow for greater ease of self-expression while remaining mutually respectful.

Shared values inform multigenerational family wealth decision-making

By first defining and articulating individual values and then clarifying and aligning family values, multigenerational families can establish the foundational cornerstone of their communication and education plan. Once this is achieved, the family can be assisted in connecting their family values with the family “valuables,” while also developing a shared framework for learning about finances and building skills to make shared financial decisions.

This education can empower the family, helping the wealth persist and even grow for future generations.

Learn how Ascent Private Capital Management^® of U.S. Bank helps multigenerational families manage their wealth today and create a legacy for generations to come.