After 43 years advising families through nearly every kind of wealth transfer imaginable, I’ve noticed something.
The families who struggle almost never struggle because of the tax plan. They struggle because nobody had a real conversation before the money moved.
That’s not how most coverage of the Great Wealth Transfer sounds. Trusts, tax brackets and estate structures dominate the conversation — and for good reason.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
An estimated $124 trillion is projected to change hands in the U.S. over the next two decades, and a lot of it runs through complicated legal and tax mechanics. Getting those right matters.
But mechanics aren’t what decides whether a family holds together or comes apart once the money actually moves. I’ve watched technically flawless estate plans blow up because the heirs were blindsided by decisions they’d never once discussed.
I’ve also watched messier, less elegant plans work just fine, because the family had already done the harder work of talking to one another.
Here’s something that should concern every family with real assets on the line. The Federal Reserve’s Survey of Consumer Finances found that the average inheritance families actually received came in well below what they expected to receive, and the gap was largest among the wealthiest families surveyed.
Most people read that as a planning or market-timing issue. I read it as a symptom. If your family’s expectations and the actual plan don’t match, it’s a sign the plan was never really discussed out loud. The dollar figure is just the first thing to surface.
The conversation that gets skipped
Early in my career, I learned a set of principles from my mentor, Joe Gabriele, that I’ve carried ever since. Chief among them: Attack problems head-on, with complete transparency. That applies to markets. It applies just as much to families.
Most parents I work with have a will. Many have trusts. Far fewer have ever sat their adult children down and explained why the plan looks the way it does, what they’ll be responsible for or what the family actually expects of them once the money arrives.
I had a client years ago, a business owner worth several million dollars, who built a detailed estate plan and never once discussed it with his three kids.
When he passed, one child assumed the family business would be split evenly. Another had quietly been promised it outright, years earlier, in a conversation nobody else knew about.
The estate plan was airtight. The family took over a year to speak to one another again.
Money didn’t break that family. Silence did.
What I ask families to do instead
I don’t tell clients to simply “loop in the kids.” That’s not specific enough to be useful, and vague advice rarely survives contact with an actual family.
What I ask them to do is sit down, together, and walk through these questions before a single dollar moves:
- What is each person actually going to inherit? In plain terms, not legal language.
- Why was the plan structured this way? What was the reasoning?
- What responsibilities come with it? A business, a property, a caregiving role for a sibling?
- What does the family want this money to accomplish two generations from now?
None of these require a lawyer in the room. They require the parents to be willing to have an uncomfortable conversation while they’re still healthy enough to lead it.
I’ve sat in on dozens of these meetings. They’re rarely as bad as clients fear, and the families who have them almost never end up blindsided later.
Why this matters more for advisers, and for families, than people realize
I’m at a stage in my career where I think about succession constantly, not just for my clients but for my own practice. My son and business partner are actively involved in the business today.
What I’ve learned firsthand is that transferring a book of business is the easy part. Transferring the judgment, the relationships and the reasons behind decades of decisions is the hard part.
It has to be modeled and explained. It can’t just be inherited by default.
Families face the same challenge with wealth. A trust document tells your heirs what they’ll receive. It doesn’t tell them why, and it doesn’t prepare them to carry it forward responsibly.
That gap is where families come apart, and it’s entirely preventable.
Where to start
If you’re in the position of planning a transfer, start smaller than you think you need to. Pick one conversation, maybe the reasoning behind your estate plan, and have it this year.
If you’re an adult child who suspects your parents haven’t had these conversations, you can be the one to raise it. In my experience, most parents are relieved when their kids ask.
The tax and legal mechanics of the Great Wealth Transfer will get sorted out. That’s what estate attorneys and advisers are for.
The part that actually determines whether your family thrives afterward is the conversation nobody wants to schedule. Schedule it anyway.
