Generational Wealth Transfer

By: Pete Marshall, Managing Partner

Many times, in movies people leave video heartfelt messages to their family and loved ones.  We all get emotional when the daughter of a dying father watches as the father tells her an inspirational message. Some clients are better than others but in reality, I’ve seen that people struggle with communication to the next generation about their wealth.  Their children also struggle in this same discussion.  In most instances, there is a lot of love, so why do we struggle so much in planning for the ultimate transfer of wealth?

According to the 2021 Cerulli report1, there are 5 top obstacles to Wealth Transfer Planning.

  1. 56% – Not comfortable sharing financial information with their children
  2. 50% Fear children are not prepared to inherit wealth
  3. 50% are unwilling to give control to the next generation
  4. 44% are uncomfortable with the concept of their own passing
  5. 33% have inexperience with multi-gen wealth strategies

With these obstacles, it’s hard enough to find a parent that will share their plan with their beneficiaries.  When a client breaks through that barrier, the son or daughter wants to show their love for their parents, and in many cases the children will say ‘I don’t care about the money’ or ‘you’ll live forever Mom/Dad’. Although this does show that the next generation cares and it’s better than talking about the new Lamborghini that they’ll buy, it makes for a bad financial plan. If the beneficiaries are not in the know about being able to receive a large inheritance, then a lot of times they will make poor decisions.

We see it at both ends.  Nothing is more deflating for our firm then when we’ve worked with a client for many years who has scrimped and saved their pennies to have a nice nest egg, then to see the children blow the funds in a couple years’ time.  On the one hand, the child can do what they want with it, but on the other hand, we know that the clients’ desires are not being fulfilled.

A few months ago, one of my clients mentioned that her father (also a client) had left her a written book containing all his wishes.  This was a particularly complicated estate situation with a booming business, expensive home, 5 siblings, and a black sheep situation.  The father had left his daughter (the executor) with written instructions in a little book on almost everything.  She had used this book to help her for roughly 2 years since his passing.  She sang the praises of the book, and it spurred an idea.

We are in the process of creating an ‘MFG book’ that we will have our clients fill in their wishes to the next generation.  It won’t be just things like death certificates and assets, it’s going to include sections to share feelings and communicate why a client wants one daughter to have their bracelet and the other to have their necklace.  Obviously, some will spend more time than others, but we think this will be a way to help bridge the communication gap.

At MFG we see how good communication and estate planning are essential.  We have seen some tough family situations, mainly from our clients who are inheriting the funds.  Finally, we encourage the following process with our clients:

  • Discuss your estate plan with your MFG Advisor.
    • This maybe simple (one beneficiary gets everything) or more complex (trusts and specified directions)
  • Set up a joint meeting with your children and the MFG advisor (If client would like).
    • We will work with smaller account-sized beneficiaries to help out our clients and make eventual transitions smooth.
  • Complete an MFG ‘last wishes’ booklet.
  • Brief Review each year/Complete Review every 3-5 years.


1The Cerulli Report “U.S. High-Net-Worth and Ultra-High-Net-Worth Markets, 2021, Evolving Wealth   Demographics.