Intergenerational Wealth Transfer: 5 tips to navigate family dynamics

Published on: November 7th, 2022

Planning for intergenerational wealth transfer is rarely easy, not least because it involves family dynamics. But it’s also an area where you can’t put your head in the sand. So today, I want to share some insights I’ve gained helping families navigate complex dynamics. 

#1 Understand that family dynamics are always complex 

Whether your plan involves only immediate family or extended or blended members, there will be dynamics to navigate, and it’s important to factor this into your planning early.

Regardless of how close your family is, planning for a wealth transfer is rarely (if ever) straightforward because emotions are involved. It’s also likely that your family members will discuss the situation with others, particularly spouses, so there are often additional opinions (and feelings) to contend with. 

#2 Transparency and open communication are key 

One of the first things I do as a specialist wealth transfer planner is to get the family together to have an open discussion. If your decision is going to cause conflict, that won’t change whether or not you are open about it. 

Full transparency may indeed lead to some tension or conflict in the early stages, but it will also give all parties a chance to resolve these feelings and come to terms with the situation. Emotions will only be heightened if parties feel they have been deceived or information hidden from them. 

#3 The most critical issues are often under the surface 

Family issues are like an iceberg; seven-eighths of them are usually under the surface. What people say and what they mean in the early planning stages are often two different things.

It’s something I see time and time again in family wealth transfer meetings. It’s important to dig into the issues in these meetings to uncover what’s below the surface in order to address them. 

#4 Death is ‘not about the money’… until it is

Before a parent passes, children often say they will be happy with their parents’ decisions and that it’s not about the money. And it’s not … until it is. 

When a family member passes, most people would like to think that they are more worried about their grief and that of others than the division of the estate. However, the reality is that it does matter. Not only are people’s financial futures wrapped up in it, but their emotions are too. 

So having this discussion during life is a must, even if feelings will be hurt. It’s better that your intentions and the thoughts behind them can be discussed rather than assumptions made when it’s too late.  

People will ‘forget’ verbal conversations or agreements or remember them differently according to their own views, so documentation of even the most minor details is a must.  

#5 You need a team in your corner  

Planning for intergenerational wealth transfer can be a rollercoaster. There are many complexities to navigate, and it’s critical to have the right team in your corner, from your legal and tax professionals to your financial planner. 

At Apt Wealth Private Capital, we have extensive experience working with individuals, business owners and their families to develop and execute wealth transfer strategies that protect your wealth and your legacy. 

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.