Living values: How can I use inheritance to teach my heirs?

Mark Speltz, Lead Family Dynamics Consultant,
Wells Fargo Wealth & Investment Management

Providing an inheritance is one way that wealth can work for you and your family, but wealth can come with big responsibilities for those who inherit. Most of us have heard stories of family legacies falling apart when the younger generation comes of age. What was once so important and impactful and identifiable with a family’s name may lose its appeal over time if values are not handed down with the wealth.

So how do you actively prepare the next generation with the lessons they need to be good stewards of their family legacy? From a historian’s perspective, we encourage starting with your family history as a foundation to teach your heirs. Understanding how your ancestors lived, what they believed in, and what mattered most can help you pass down the family lessons and stories most important to your legacy.

Understanding the past
Every family has a unique history, of course, but pause for a moment and think about your own story. Who are you and where did you come from? How has your life and identity been shaped by those who came before you? What values and wisdom have they handed down to you? And what lessons are you continuing with your family today?

Now, think about your ancestors who achieved significant success. They surely endured obstacles, possibly financial ruin or misfortune, along the way. They might have lent a hand to family members, extended credit to customers, or given to charities as well.

Whether based on ingenuity, grit, or generosity – or a combination – a family’s values endure and guide them through those hardest times. If you wish to perpetuate values like these among your beneficiaries, I’d encourage you to be intentional about sharing them.

By helping the younger generation understand the values underlying your family’s culture, you can empower them to do great things with their legacy, especially through philanthropy.

One way families capture values and share stories is by creating what we call a legacy letter to express the “why” behind the “what” of their estate plan. Possibly your gift is meant to help the recipient fulfill a dream of becoming the next in a long line of entrepreneurs. The letter can then tell the story of the ancestor who first forged that trail, creating an artifact of the legacy as well as of the gift itself.

Others incorporate storytelling into holiday gatherings, family reunions, or business meetings as a means of creating a deeper sense of appreciation for the family’s legacy. Some of these may be wealth origin stories. “What did it take to create the wealth?” Others may focus on the attributes of inspiring individuals in your family tree, from educators and entrepreneurs to volunteers and veterans. All of these stories can and will mean something different to each generation, so spend the time to help them understand how they are part of something larger than themselves.

Creating the future
By helping the younger generation understand the values underlying your family’s culture, you can empower them to do great things with their legacy, especially through philanthropy.

Families with a clear sense of how their core values influenced past giving can align around themes and causes that are meaningful and relevant to them today. Again, my advice is to take cues from your family’s past. Think about any causes your loved ones held dear and consider where those impulses came. Did your family generously support educational ventures or the construction of a hospital? Just as impactful: Did your family rely on support from others during their lives?

Keep in mind that areas of focus for the family’s philanthropy can change over time – with themes ranging from education, to the environment, healthcare, or social justice. So make space for multigenerational conversations about values as sharing and listening to viewpoints can lead to growth and respect across generations.

As you extend education into action, give everyone a chance to participate in an active, age-appropriate role. For example, while older family members can take more of a leadership role, younger family members can research causes important to them, explore specific charities, even select and direct certain family giving efforts. By working together as a family to understand your history and commitment to values, you can continue a legacy your family can be proud of now and for generations to come.