Why your family wealth story matters

It’s never too early or late to start telling the next generation the story of how your family’s wealth was created. Stories are powerful and can create lasting bonds and a legacy to pass from generation to generation. But for many people, starting such a conversation falls into the too-hard basket. For some it’s a lack of time, others it’s fear of saying the wrong thing or just not knowing how to begin.

Having grown up in a successful family business, and after nearly 20 years working as a psychologist, I’ve refined a framework that helps families broach the all-too-often elephant in the room – their wealth and the story of how they got it. When it’s done well, it’s an ongoing conversation led by the listener. But let’s remember people and families are like snowflakes, finger prints and zebras – unique. So the specifics of how to apply principles and approaches may differ, what works for one family or person may not work for another.

But first let’s delve into common reasons people hold back from talking to the next generation about their family wealth…

Why don’t we start talking to the next gen about our wealth or how we got it?

When a rather rough first gen dad came to me for advice on succession planning, he was estranged from his adult children and held little hope of restoring the relationship. We talked about the legacy he had created for his family, and whether they knew his story. The answer was no and he couldn’t see that changing – but it did, we’ll get to that soon.

In my practice I see a range of wealth creators from different backgrounds and cultures who are struggling to talk to the next gen about their family legacy and story. That rough first gen dad was no different to many others.

People often say they have plenty of time to talk, they think everyone knows the family story and aren’t interested in more detail, or they worry about creating entitlement. But often they haven’t checked in with the next generation to find out what they have taken from the conversation – sometimes what we communicate, and what others hear, are two different things! I’ve had next gens say to me they thought their parents were on their deathbeds, or that there’s got to be a hidden message because the topic is new to them.

Sometimes the person holding the information has been burnt by a past experience, or subsequent generations feel it isn’t their story to tell – but trust me, there is a story to be told in keeping the wealth together. 

It’s important anyone considering starting to tell their story within their family should assess the health of their family in terms of communication, decision making and relationships. These influence when and how you would best do this (we’ll get into more detail on this in the next edition).

Family stories create legacy.

Your wealth isn’t the only legacy you can leave behind. A family story about how that wealth was created and held together through the good times and not so good times, and the values associated with the family, can create a powerful long-lasting legacy and reference point. That story creates pride, connection, understanding and appreciation of the wealth and a respect for the sacrifices associated with it. This helps to build resilience in your family members and your wealth. It’s not only children who enjoy a good story – even for adults, it is much more powerful and memorable to tell stories and impart knowledge than set rules that can become cumbersome over time.

That rough first gen dad took a bold first step and invited his three adult children around for tea, and started to tell them the story of their family’s wealth and his own journey in business. It’d be fair to say he wasn’t expecting a miracle. But his children kept asking questions and he shared events that had happened when they were growing up, giving them a context to understand not only the family’s wealth but also why their parents’ marriage had fallen apart, and who their dad was.

A family story can be very unifying. In difficult times family stories can provide comfort or hope, focus or perspective, and they can also encourage family members to contribute to the next chapter. Recently that rough dad told me his relationships with his children had improved beyond his wildest imagination since that first conversation a year ago.

I’ve never yet had a client have their worst fears realised through sharing their story or engaging with their family. Telling the story of your family’s wealth can be enjoyable and often creates an ongoing interest and opportunity for rich conversation with the next generation which often sees the story formalised in some way.

Next month, we’ll take a look at how to do this well and some common pitfalls to avoid.

Evana Lithgow is a psychologist with 19 years’ experience. She is the Managing Partner of Working Minds, a boutique practice focused on guiding clients through the people side of succession, transition, change and growth. Having grown up in a successful family business, Evana brings a unique understanding and empathy of her area of expertise. www.workingminds.co.nz