Many families put enormous effort into structuring the assets and less into preparing the people who will inherit them. I spend a lot of time with families where the current generation wants to transition and the rising generation wants to be more involved, yet neither is sure how to start.
Jay Hughes, one of the founding leaders in the family wealth field, prefers the term “rising generation” to “next generation”. “Next” casts people as successors waiting their turn, while “rising” reflects them growing into their own knowledge and influence, so it’s the term I’ll use here.
With Christmas approaching and families getting together, opportunities to open up and share in an informal setting could be a great way to start the conversation.
Current Generation
To be frank, transition starts with the current generation. They need to decide what they are willing to disclose, explain why things were kept back in the past and accept that the rising generation may want different lives.
1. What you are willing to disclose
What you are willing to disclose includes not only the dollar figure of the family’s net wealth but topics such as:
What wealth exists and why it matters. For example, that there will be enough that the rising generation's choices won’t need to be driven by money, but that comes with responsibilities that they need to be prepared for.
The structures that exist and particularly the ones they’re already part of. For example, a 19-year-old family member who has been receiving distributions from the family trust and signing tax returns but doesn’t know much more than that.
The estate plan and the reasoning behind it. For example, the farm or business going to the child who works in it, with siblings equalised from other assets or through testamentary trusts. This is particularly important if beneficiaries are not treated equally.
The family business. For example, its approximate value, whether anyone is being considered for succession, how family members are paid compared with market rates and whether a sale is being explored.
It is normal for families to not share the whole picture straight away.
2. Explain why information was held back
A transition by nature occurs over time and sharing different information in stages and ages is a normal occurrence. However, when information is withheld for too long and a transition of this knowledge hasn’t been planned, family members can fill silence with their own stories or feel a sense of mistrust. Explaining why the whole picture is not shared straight away will help plan for how knowledge can be transferred. The reasons I most hear:
Protecting ambition. Parents want their children to build a life they’re passionate about, and it takes care to balance expectations around the wealth or the family business with the freedom to choose their own path.
The fear of entitlement or social pressure attempts to protect the rising generation from how they are treated and perceived by others. This approach can backfire if the family members are kept in the dark but others (and worse, the public) know more than them. An example of this is the story of Amelia St Baker in episode three of the Significant Women podcast who discovered her family’s wealth at school when her teacher shared the AFR Rich List with her class.
Admitting that the current generation hasn’t worked through a plan can be hard but being vulnerable and open helps open the door for the rising generation.
Breaking the generational habit of “because my parents never told me anything, I didn’t realise there was another way” invites self-reflection and a willingness to engage.
Being cautious about relationship breakdowns, in-laws and partners is ok to work through as a family in a way that is comfortable.
And lastly, sometimes the current generation has their own feelings about wealth - shame, fear or guilt, which they are wrestling with. Admitting the reluctance to share knowledge is due to personal discomfort, again opens a door to family rather than shutting it tight.
3. Accept the rising generation’s choices and pathways
Accepting that the rising generation may want a different life can be easy for some and very difficult for others. Some of the ways adult children’s lives can differ may not always relate to career:
Earning capacity and understanding when one chooses lower-paid, meaningful work, another working in the family business, and another in a completely different industry.
Differing values about wealth such as wanting the portfolio out of fossil fuels, wanting impact investments, or wanting to give a large share away. The family investment policy may need room for different views.
Differing views on relationships such as a partner the parents didn’t expect, marrying outside the family’s faith or culture, or choosing not to have children.
And similarly the rising generations' feelings about wealth and how that may have dictated their choices.
Rising generation
In my experience the best family conversations happen when both generations have done some work beforehand. So if you’re a member of the rising generation, I’d encourage you to prepare as well, and to think about what you can bring to the table in your own way.
Write down what you actually want to know and why, so the conversation has a purpose beyond the numbers.
Spend some time on what you want from your own life, separate from what the family might expect of you.
Learn enough of the language (trusts, appointors, directors, testamentary trusts) to follow the discussion, and read any documents you already hold a role in. AI tools can be a wonderful tutor here, explaining unfamiliar terms and making sense of board minutes, as long as you’re careful about which confidential documents you share with them.
Notice any assumptions you’ve formed about fairness or favouritism, and try to hold them loosely so there’s room to hear something different.
Offer to keep what you learn confidential, because trust in your discretion often opens the door to more information.
Bring something of your own to offer, such as a view on the family’s giving, a skill the business could use or an idea for how you’d like to learn.
Arriving prepared is one of the most generous things a rising gen can offer their family, because it shows they’re ready to take part, and that makes the next stage much easier to begin.
Working Together
Once each generation has prepared in its own way, the next step is bringing everyone into the same room. Families who make the most progress treat this as a process they build together over time.
Agree why you’re coming together and what you hope will be different a year from now.
Start with a first meeting that has a modest agenda, such as the family’s story, its values and what each person hopes for, and leave decisions for later.
Set some ground rules early, including confidentiality, making sure everyone is heard and allowing time to reflect before responding.
Share information in stages, beginning with how the structures work before moving to roles, plans and figures.
Bring in the family’s advisers to explain the structures, so questions can be answered by the people who know them best.
Choose a small shared project, such as a giving decision or reviewing one part of the estate plan, so the family practises making decisions together.
Set a regular rhythm for family meetings, and keep notes of what was discussed and agreed.
Write down the principles you agree on as you go, because these become the foundation of a family charter later.
Review how the process is working every so often, and be willing to change the pace or approach.
Often a rising leader in the family takes on the job of keeping this work moving, and part of that role is knowing when to bring in outside expertise, whether that’s a facilitator, a coach or an independent adviser who can coordinate the pieces.
Where to begin
Preparing the people takes longer than preparing the wealth, and it rarely follows a straight line. The families I see do this well are the ones who start early, start small and keep talking, and over time their wealth ends up supporting their relationships instead of straining them.
This is the work I enjoy most at Kinexis. As a Family Wealth Navigator, I help families plan their transition, prepare each generation for the conversations ahead and coordinate the advisers, facilitators and specialists involved so every piece fits together. If your family is ready to begin, or you’re a rising leader wondering where to start, I’d welcome a confidential discussion.
Get in touch to start that conversation.
This article provides general information only and does not constitute financial, investment, tax or legal advice. Advice should be obtained for your specific circumstances.
