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Wine Talk April 29, 2021: The Importance of Legacy Planning

Wine Talk

April 29, 2021

 The Importance of Legacy Planning


Is the money message in your family: “We don’t talk about money, and we don’t know why we don’t talk about it”?  If so, you’re not alone.  Only 29% of baby boomers and older admitted that they have had in-depth conversations about legacy and inheritance in any productive or meaningful way.  Many well-to-do parents and grandparents say they would like to talk about money but put it off often because they don’t know how to have that conversation.  While nearly 50% of parents say they miss opportunities to talk to kids about money and finances, over 50% of children wish their parents had taught them more.

Family wealth is not self-perpetuating.  Without careful planning and stewardship, a hard-earned fortune can easily be dissipated within a generation or two.  Consider this:  approximately 80% of high-net-worth families created their wealth during their lifetime.   They are first-generation wealth creators, meaning their wealth wasn’t handed to them; it was earned.  Furthermore, seventy percent of family wealth is lost in the transfer from the first to the second generation.

Families desire to pass on not just an inheritance but the values and life lessons that helped create their lifestyle.  When asked what is most important to pass on to future generations:

  • Values and life lessons – 74%
  • Instructions and wishes to be fulfilled 47%
  • Personal possessions of emotional value – 43%
  • Financial assets and real estate – 32%

So, what can we do to educate the next generation?  First, determine the purpose, meaning, and values of family wealth.  Next, articulate those values to the next generation.   Create a family mission statement.   Purposely share your values with your children and grandchildren.  The best age range for developing views on money is between ages 7-14, but it’s never too late!  Then, define the rationale behind money rules.   Research shows that the rising generation wants parameters around access to money as well as boundaries, and accountability.   Clearly defined rules also help set the stage for the idea that what’s fair isn’t always equal.  Lastly, teach money management skills.  Important topics to cover are: how to keep track of money, live on a spending plan, handle credit wisely, save effectively, spend with purpose, invest to achieve goals and how to preserve wealth.  

A great way to engage the family in the money conversation is with a Wealth and Values Meeting.  The objectives of a Wealth and Values Meeting are:

  • Share thinking about money, as well as personal and family goals.
  • Exchange questions, concerns, hopes and fears about wealth, the future, and responsibilities.
  • Discuss the family “story” – the history of the wealth and family enterprises.
  • Invite younger generations to contribute their viewpoints.
  • Establish a value framework for personal and family decision-making and expectations.
In conclusion, it’s essential to bring the money and values conversations into your family.   These conversations are part of what it takes to navigate wealth transfer with purpose.  You now have the basics of educating money management skills and know-how to begin organizing your first Wealth and Values Meeting.




Napa Wealth Management is registered as an investment advisor with the Securities and Exchange Commission. Nothing provided herein constitutes legal advice. Individuals should seek the advice of their own attorney for specific information regarding estate planning.

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