By John C. Fales
For families of affluence, transferring wealth to the next generation is about much more than numbers and legal documents. It’s about values, legacy, and responsibility. Without thoughtful preparation, wealth can do more harm than good, leading to entitlement, lack of purpose, or even fractured family relationships.
Financial entitlement in heirs refers to a mindset or behavior where an individual assumes they are owed wealth simply by virtue of their family status, without acknowledging the responsibilities, work, or values that typically come with it. This entitlement can manifest in subtle attitudes or very visible behaviors.
“Leave your children enough so they can do anything, but not enough that they can do nothing.” -Warren Buffet
So how can you prepare heirs for wealth in a way that empowers them rather than entitles them?
Here are key strategies that families can use to instill responsibility, resilience, and a long-term view of wealth.
- Start with Family Values, Not Finances
Before talking about money, talk about meaning. What does your family stand for? What are your values around work, giving, relationships, and legacy?
Wealth should support a purpose, not replace it. Hold family meetings to discuss shared values and goals. These conversations help anchor financial decisions in a moral and emotional foundation and provide a compass for future generations.
- Make Financial Literacy a Lifelong Process
Many heirs aren’t prepared for the technical side of wealth management. Budgeting, investing, tax planning, and philanthropy may seem overwhelming if they’ve never been taught.
Start financial education early and make it age-appropriate. For younger children, this might be managing an allowance. For teens, investing in a mock portfolio. For young adults, it’s understanding trusts, income planning, and charitable giving.
Financial fluency builds confidence and diminishes the mystery (and sometimes arrogance) around wealth.
- Teach Stewardship Over Ownership
One of the best ways to counter entitlement is to frame wealth as a tool for stewardship rather than ownership. When heirs see themselves as caretakers, responsible for growing and using wealth wisely, they may be more likely to make thoughtful, values-aligned decisions.
Encourage questions like:
- How can I use this wealth to make a positive impact?
- What are the long-term effects of my financial choices?
- How can I contribute to the family’s legacy rather than simply inherit it?
- Introduce Responsibility Gradually
A sudden transfer of wealth can be destabilizing. Instead, consider giving heirs increasing levels of responsibility over time.
- Let them manage a small investment account.
- Include them in discussions with your financial advisor or estate planner.
- Ask them to co-lead a philanthropic initiative.
Think of wealth readiness like a career ladder: each rung helps build confidence, experience, and maturity.
- Encourage Purpose and Work Ethic
Wealth can be a powerful enabler, but it shouldn’t replace personal ambition or work ethic. Encourage heirs to pursue education, careers, and passions independently of the family fortune. Many families even set guidelines (or limits) on how and when heirs can access funds.
Help them understand that wealth is a tool to support a meaningful life, not a shortcut to avoid building one.
- Normalize Open, Ongoing Conversations
One of the biggest mistakes wealthy families can make is staying silent. Children often sense wealth long before it’s discussed, and without guidance, they create their own assumptions.
Talking openly about money, values, mistakes, and expectations fosters trust and clarity. These conversations should be regular, not one-off events. Over time, they help build a family culture where money is discussed with intention, not secrecy.
- Involve Professionals to Bridge Gaps
Sometimes, families need outside help. Wealth psychologists, family governance advisors, and estate planners can all play a role in educating heirs and resolving sensitive issues. Their perspective can bridge generational gaps and keep discussions productive.
Working with professionals also models a healthy, collaborative approach to managing wealth – something heirs can continue after the transfer.
Wealth is a gift, but without preparation, it can become a burden. By focusing on values, education, and purpose, families can pass on not just financial capital, but human and social capital as well.
Proactive family culture, financial literacy, and value-driven conversations are essential to shift the mindset from entitlement to empowerment. It’s about raising stewards, not spenders. And it’s one of the most meaningful investments a family can make.