It's not hard to see much has changed in recent decades as the world has become steadily more prosperous and more complicated.

Along with new-found wealth, social attitudes have shifted too, which presents challenges for high-net-worth (HNW) families who want to transfer assets to their heirs.

How to address conflicting values

Sometimes, there needs to be a truly customised approach to wealth transfer. This happened recently when one RBC client, a woman in her early 60s, wanted to give her three daughters in their 20s and 30s, a gift of £3.5 million each. After the accounts were established, the mother decided to get her children more involved in the investing process. Although the trio had scant investment management knowledge, they still had firm views about what investments were not acceptable, at least for them. Specifically, they didn't want to own arms companies, oil drillers or pharmaceutical firms, as they didn't fit with their moral values.

"It was important for [the daughters] to get that point across at the first meeting, which is probably quite typical of that generation," says Paul Canas, associate director for relationship management at RBC Wealth Management in Jersey.

Bold plans can help create a lasting legacy

While many HNW individuals worry solely about transferring to the next generation, some have bolder ambitions. One RBC client, of significant wealth, wanted to make sure the family legacy lasted for centuries. "They have amassed so much wealth they are developing a 200-year plan," says Chris Matthews, managing director of relationship management at RBC Wealth Management in Jersey. "It was really striking. You wouldn't have had that conversation 15 years ago."

These are just two examples of what is becoming a theme with HNW individuals. "Wealth transfer is probably the biggest thing we're having discussions over," says Lloyd Maxwell, associate director for relationship management at RBC Wealth Management in Jersey. Typically, the so-called wealth makers of the families are now in their late 50s and early 60s, he says. In other words, clients are typically not having these conversations until later in life while professionals such as Maxwell wisely think sooner is better.

And those conversations around transferring wealth are increasingly complex today due to changes in family dynamics and their differing values, he says.

Change in social attitudes

One social change affecting wealth transfer is the rise in divorce and remarriage. Close to four-in-ten (37 percent) of marriages in England and Wales end in divorce after 20 years, according the Office for National Statistics. (Almost all marriages were between men and women as same sex marriage was legalised only in 2013 in those countries.)

Second spouses, stepchildren, and sprawling family trees are no longer uncommon these days.

At the same time, younger generations approach life from a different perspective than their parents or grandparents. Socially responsible investment is a growing trend, according to the 2019 Responsible Investment Survey by RBC Global Asset Management. And according to New wealth rising, a 2019 study conducted by the Economist Intelligence Unit on behalf of RBC Wealth Management, 69 percent of Generation X, Millennials and Gen Z said "it is important to me that I invest ethically", compared to just 52 percent of Baby Boomers and the Silent Generation.

This new social landscape not only presents potential for intergenerational friction, it also complicates how HNW families pass on their legacy to their children or grandchildren.

Do you have a will?

One key to managing the transfer of wealth is to gain a deep understanding of what the key stakeholders desire. A smart way to kick off that discovery process is by having a conversation about a client's will. More often than you'd think, HNW individuals don't have one or it has not been kept up to date, Matthews says. "Human beings don't like thinking about dying," he says.

It might be uncomfortable, but it's a necessary conversation because what's written in the will should address what happens to the wealth after that person's death. "The will is central to planning," Matthews says. It answers the question of who do you want to receive wealth and how much of it, he says. In other words, that document provides a foundation for all other aspects of wealth planning. That's normally the piece that unlocks the other planning options, he says.

Having a discussion early also helps avoid the awkward moment of first discussing money with a beneficiary soon after the death of a loved one.

Start the conversation with family as soon as possible

Extended family members should be a part of conversations as early as possible. That's a shift from the past where typically, plans would be made solely with the head of a household or wealth creator.

"It's increasingly important to have those discussions with other family members," Canas says. "They have their ideas that may be different from those of Mum or Dad."

Those discussions help to inform everything about the distinct needs of the heirs as well as the benefactor. What may become clear is that different people have differing needs.

How to tackle multiple priorities of an estate

The rise in property prices over the last two decades means HNW parents now frequently assist children with the purchase of a first home. "I see lots of parents helping kids get on the property ladder, as the next generation doesn't yet have that level of wealth," says Maxwell. This help can sometimes come in the form of a loan guarantee or as a gift.

Another estate planning tool is a prenuptial agreement. This can limit a spouse's claim on marital assets and help protect the family legacy.

Aspirations of individual family members also play into the wealth transfer process. Many Millennials, those born between 1980 - 2000, are keen to start businesses, particularly in the technology sector. "Funding those entrepreneurial pursuits can help them on their path and can create wealth," Canas says. "These are opportunities that weren't necessarily available to generations past."

This publication has been issued by Royal Bank of Canada on behalf of certain RBC ® companies that form part of the international network of RBC Wealth Management. You should carefully read any risk warnings or regulatory disclosures in this publication or in any other literature accompanying this publication or transmitted to you by Royal Bank of Canada, its affiliates or subsidiaries.

The information contained in this report has been compiled by Royal Bank of Canada and/or its affiliates from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgments as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every province in Canada, state in the U.S. and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any securities discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.

This material is prepared for general circulation to clients, including clients who are affiliates of Royal Bank of Canada, and does not have regard to the particular circumstances or needs of any specific person who may read it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. To the full extent permitted by law neither Royal Bank of Canada nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of Royal Bank of Canada.

Clients of United Kingdom companies may be entitled to compensation from the UK Financial Services Compensation Scheme if any of these entities cannot meet its obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for up to a total of £85,000. The Channel Island subsidiaries are not covered by the UK Financial Services Compensation Scheme; the offices of Royal Bank of Canada (Channel Islands) Limited in Guernsey and Jersey are covered by the respective compensation schemes in these jurisdictions for deposit taking business only.

We want to talk about your financial future.