When Robert K. inherited a multimillion portfolio of real estate and financial assets from his father and mother, he immediately began thinking of the next generation.
Questions about his inheritance kept Robert up at night. How could he make sure his children were prepared to use and manage the money wisely? Would it enrich their lives or ruin their potential? He’d seen too many families wrecked by arguments about finances and too many young people who lost their drive when they came into money.
Robert met with his financial advisor to talk about how to manage the family’s wealth. The advisor explained that being a good heir was partly a matter of turning the next generation into good heirs. Through a combination of fiscal responsibility, education, communication, and ethical considerations, Robert could ensure the wealth transfer truly empowered and benefited his children.
If you’ve recently inherited substantial assets, you may be wondering how you can be the best kind of heir, the one that uses wealth to make their family happier, more successful, more secure, and better positioned for the future. Here are some of the ways effective heirs position their own heirs for success.
Your heirs can’t manage wealth effectively if they don’t understand basic financial concepts. Give them a strong grounding in personal finance including budgeting, investing, saving, and managing debt. This can involve formal education, self-study, or hiring financial advisors.
Your family will learn their best financial habits by watching you. Model the behavior you’d like to see by being responsible with your money, investments, and philanthropy.
Many families don’t like to talk about money, but it’s important to discuss financial matters openly with your heirs. Let them know not only how much they’ll be inheriting but how it has been invested and how it aligns with your family’s shared values and goals. Encourage questions and discussions about how wealth should be managed and distributed.
Even if your heirs don’t need to work for financial reasons, they’ll likely be happier, more productive people if they do. Make sure they understand the value of a strong work ethic and a sense of responsibility. Help them appreciate the value of challenging work and the importance of earning their own success even if they stand to inherit wealth.
Starting a business can be immensely satisfying, and it can create additional wealth for future generations. Foster an enterprising spirit among your heirs by encouraging them to pursue their passions and explore business opportunities.
Share the values that helped you build your wealth with your children. Emphasize the importance of integrity, humility, and giving back to society. Teach your heirs that wealth comes with responsibilities including philanthropy and contributing to the well-being of others.
You can bring your family closer together by developing a family mission statement that outlines your family's values, goals, and principles related to wealth management and distribution. This can serve as a guiding document for current and future generations.
Don’t stop with basic financial education. Give your heirs access to workshops, seminars, mentoring programs, or internships to increase their understanding of the challenges and responsibilities that come with significant wealth. Your financial advisor can help you identify opportunities for further education in topics including financial management, investing, and entrepreneurship.
Your heirs will be better equipped to deal with their responsibilities if they know what’s ahead. Develop a clear succession strategy for passing down wealth to the next generation. This may involve creating trusts, wills, and other estate planning documents. Share that strategy with your heirs so that they can prepare for the eventual transition of assets.
Family wealth strategies is an ongoing process. Talk to your heirs regularly about how they’re progressing with their financial education and development. Ask them how they’re managing at work, with their families, and with their investments and charitable commitments. Offer guidance, support, and feedback as they navigate their own financial journeys.
When you inherit money, you also accept responsibility for it. Your job as an heir is to prepare your family for the challenges they’ll face. By following these steps, you can help ensure you are a good heir and that you raise heirs prepared to responsibly manage and grow generational wealth.
This article is provided for general informational purposes only. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
SMRU #6459489 exp. 4/2/2026