{"id":2622,"date":"2017-06-20T20:00:00","date_gmt":"2017-06-20T20:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insightsshare-your-financial-values-with-your-children\/"},"modified":"2023-11-01T11:05:35","modified_gmt":"2023-11-01T15:05:35","slug":"share-your-financial-values-with-your-children","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insights\/share-your-financial-values-with-your-children","title":{"rendered":"Share your financial values with your children"},"content":{"rendered":"

Wonderful as it may be to pass along wealth to your children, it’s at least as important to share your financial know-how, philosophy and values with the next generation.<\/p>\n

Whether your children are in preschool, high school or beyond, it’s likely neither too early nor too late to teach your kids about money, financial management, saving, investing and giving.<\/p>\n

Many high-net-worth parents, however, don’t prepare their children for large inheritances<\/a>, neglecting to provide guidance or to arrange the wealth transfer in ways that will protect both offspring and nest egg.<\/p>\n

“Generally there’s an inverse relationship between wealth and passing on knowledge and values<\/a>. It’s the reverse of what everyone would think,” says Angie O’Leary<\/a>, head of Wealth Planning at RBC Wealth Management–U.S.<\/p>\n

Families of modest means, motivated by fear of not having enough money, often do pass along financial knowledge, she says. That fear “teaches you how to save, how to invest, how not to be taken advantage of … how to squirrel away every nut.”<\/p>\n

In contrast, O’Leary says, many multi-millionaires—uneasy about discussing money—haven’t taught their offspring about finances or given them an “inheritance education” in interacting with portfolio managers, wealth advisers and lawyers. The children may inherit wealth in their 50s or 60s with little clue about how to handle it.<\/p>\n

“They’re rather ill-equipped to go out in the real world when they’re called upon to manage and house that wealth,” O’Leary adds, noting financial advisers often see families implode after wealth transfers to the next generation.<\/p>\n

Money conversations are important, as U.S. heirs are expected to inherit more than $3.2 trillion within a generation, according to RBC Wealth Management’s Wealth Transfer Report<\/a>, which was based on a survey of more than 1,200 Americans with average investable assets of $4.3 million.<\/p>\n

Among other points, RBC Wealth Management found:<\/p>\n