The Great Wealth Transfer: Beyond Dollars and Cents

How Advisors Can Help Families Pass Down Values Alongside Wealth

The great transfer of wealth is not just about money. It’s about passing down family values.

Many families seek to leave their kids a strong sense of key values that shaped their lives, made them successful, and got them through hard times – and will eventually shape their legacies.

Clients will likely pass on money rather than values unless they have a plan and attend to this task with the same thoughtfulness as you do financial wealth management. The way that one generation passes on its values to the next usually reflects the same philosophy and attitudes as the transfer of wealth.

Advisors are helping clients navigate the tricky legacy landscape for clients as they try to better understand how the values that their children espouse are the same or different – and what impact that has on family money and multi-generational charitable giving strategies.

Don’t Rush The Planning Process

Many families want to be charitable and have a general idea of the causes they support or the changes they would like to see in the world, but they don’t know how to make the biggest impact. For these client families, Debra Brennan Tagg, CFP®, President of BFS Advisory Group in Dallas helps them to craft a philanthropic mission statement which guides them and future generations to choose where their charitable dollars go, and – almost as importantly – where they do not go. And, this process takes time, says Tagg.

For clients that want a philanthropic advisor, Tagg works with Communities Foundation of Texas. For many other clients, a Donor Advised Fund (DAF) is a common charitable giving vehicle. “For clients without a clear philanthropic mission who are looking to make charitable donations but are in a year-end time crunch, we encourage them to contribute to a DAF so they can secure the tax deduction now but be intentional about where the money goes in 2025. DAFs also provide a learning experience for future generations – helping them to understand that designating funds to give away can be as important in some families as accumulating funds for education, retirement, or other purposes,” explains Tagg.

Tagg shared that she is currently working with a family in Dallas with one spouse that is an executive at a privately held company with robust benefits and earning potential. Their children are in college and young adulthood and have been raised watching their parents find great joy in donating their money. Due to their increasing income and net worth that has grown far beyond their expectations, Tagg and her team defined a philanthropic mission statement to focus their giving and impact. “December is very busy for both of them, so funding a DAF at year-end allows them to deploy those dollars the following year when they can be more intentional,” says Tagg.

The Tax Impact of Charitable Giving

Charitable giving isn’t just about generosity—it’s also a strategic play for tax efficiency. Families with high-income years, whether from peak earnings or one-time events like bonuses, deferred compensation payouts, or business sales, often increase donations to reduce tax liability. "It’s like making the right play at the right time," says Michael Gold of Gold Family Wealth in Westport, CT. "Strategic giving can help clients offset taxable income while advancing their charitable goals."

For some, larger donations in high-income years create immediate tax savings. Others take a long-term view, deferring gifts until estate planning becomes critical to minimize estate taxes or build a legacy. Either way, timing matters—just as it does in sports. Knowing when to act can turn a good move into a game-changer.

DAFs vs Private Foundations: Choosing the Right Team

When it comes to charitable vehicles, DAFs and private foundations play different positions. A DAF is like a trusted closer in baseball—low-cost, efficient, and effective for immediate or flexible giving. Private foundations, by contrast, are more like team managers—demanding hands-on involvement, from hiring staff to managing grants and investments. "DAFs work well for donors who want simplicity, while foundations suit those seeking greater control and involvement," Gold explains.

Tax rules differ, too. Cash contributions to a DAF are deductible up to 60% of adjusted gross income (AGI), compared to 30% for private foundations. For appreciated stock, DAFs allow deductions up to 30% of AGI, while private foundations cap this at 20%. Understanding these distinctions ensures clients can balance tax benefits with their philanthropic goals. Just like in sports, having the right game plan—and the right team—makes all the difference.

Family Values: A New Kind of Discovery Process

Retirement and Transition Coach Kirsten Meneghello, JD, PCC, CPRC, of Illumination Coaching in Portland, OR emphasizes the importance of cultivating a charitable giving mindset centered around values, impact, and legacy for both mid-career families and those approaching retirement. Meneghello guides clients through a discovery process that identifies their core values, utilizing exercises and assessment tools to help them establish priorities for their retirement years.

Once clients have a clear understanding of their values, they can engage in meaningful, non-judgmental conversations with their families. This process encourages multiple generations to explore their shared values and identify common areas of interest, such as addressing food insecurity through both startup food banks as well as long-established churches. “By focusing on these shared values, families can collectively support causes that align with their core beliefs and ultimately create a lasting legacy that reflects their commitment to making a positive impact in their communities,” adds Meneghello, a member of the Retirement Coaching Association.

Defining and Passing Down Family Values

For many families, articulating and preserving shared values is an overlooked step in building a lasting legacy. According to Alex Kirby, founder of Maryland-based Total Family, “Many families have not formally defined their values. We encourage individuals or households to select four or five words that represent their core principles. Without defined values, they often remain implicit and are much harder to pass down.”

The process starts with self-reflection. Defining individual values is essential, as each person must identify what matters most to them. “Your parents might have guided your values, but ultimately, you decide what’s important to you as an individual,” Kirby explains. When it comes to shared values within a household or family foundation, collaboration becomes key. Partners may need to align on collective values for the household, while larger groups can establish shared values for initiatives, like charitable giving, while respecting individual autonomy.

Turning Values Into Action

An effective way to uncover shared values is to look at the causes a family already supports. Advisors and family offices often guide clients through an exercise that involves identifying common threads among the charities they donate to. “This can reveal the core values driving those choices,” Kirby notes. “It’s not about finding the ‘right’ answer—there isn’t one. It’s about fostering meaningful conversations around what matters most.”

Kirby, who works primarily with family offices, emphasizes that discussing family values isn’t a one-time event. “It’s not a single conversation—it’s more like 10 smaller conversations over several years.” These ongoing discussions ensure that values remain front and center as families evolve. For advisors, facilitating these conversations can strengthen family bonds and provide clarity for future generations.

Now let’s take a look at tools that advisors are using to facilitate family harmony and communication.                          

The Financial Legacy Letter: A Powerful Tool for Family Communication

A financial legacy letter offers a unique opportunity to connect with your clients’ families on a deeper level. While not a legally binding document, it complements a client’s will and estate plan by capturing their wishes, values, and motivations for future generations. According to Michael Gold, “A legacy letter provides an opportunity to communicate the ‘why’ behind financial decisions, creating clarity and minimizing potential discord among heirs.”

The letter serves as more than a statement of intent—it’s a personal expression of a client’s values and priorities. For families with multi-generational wealth, it can be a vital way to articulate the reasons behind charitable giving, specific bequests, or other financial decisions. “It’s about passing on more than assets,” Gold explains. “It’s a chance to share the principles that guided those decisions and inspire the next generation to continue that legacy.”

A legacy letter can bridge the gap between generations by conveying values and encouraging open dialogue. Parents who prioritize charitable giving, for instance, can use the letter to explain their commitment to philanthropy and how it shaped their choices. This can inspire heirs, especially those who may have seen firsthand the impact of giving back, to continue those traditions. “Some kids are naturally wired to be philanthropic because their parents lived it and spoke openly about its importance,” says Gold.

For financial advisors, incorporating a legacy letter into estate planning discussions is an opportunity to go beyond numbers. It’s about helping clients define their family story and ensuring their values are passed to the next generation. As Gold advises, “The key is taking the time to know your clients—not just their finances, but their aspirations and family dynamics. That’s how you create a plan that truly reflects their legacy.”

The Importance of Family Meetings in Wealth and Philanthropy Planning

Family meetings are a powerful tool for advisors looking to deepen client relationships and ensure seamless wealth stewardship across generations. Properly planned and executed, these gatherings bring families together to establish shared goals, foster transparency, and memorialize the unique stories that define their legacy. Myles J. McHale, SVP at Cannon Financial Institute notes that such meetings provide a platform to "capture history," ensuring family stories and values are passed on and understood by future generations. These conversations help shape a family's perspective on wealth stewardship and philanthropy, providing clarity around roles and responsibilities.

Beyond storytelling, family meetings play a critical role in aligning family members on common values and long-term goals. Advisors can facilitate discussions that promote shared decision-making around wealth and giving, helping clients to agree on guiding principles for future philanthropy and investment strategies. These conversations are not just about preserving wealth—they’re about preserving purpose, fostering connections, and giving families a collective vision for their impact. As McHale emphasizes, these discussions "help ensure transparency" and foster trust between generations, reinforcing a sense of responsibility to the communities and causes they care about.

“Advisors who adopt the role of both communicator and educator can position themselves as indispensable resources for the family’s financial future. These meetings, when done well, create a bridge for ongoing dialogue, giving advisors the chance to update plans and demonstrate value over time, even after the matriarch or patriarch is no longer at the table,” says McHale.

Family Conversation Tips from Next Chapter

Steve Gresham and Suzanne Schmitt of Next Chapter have deep experience in helping advisors gain the confidence they need to facilitate family conversations that lead to both family harmony and client retention. Here are practical family conversations tips from Moments That Matter:  the foundational work of their NextChapter project, The Family Conversation.

Five Things to Remember on Moments That Matter (MTM):

1. Partner – frame MTM planning as a team effort.
2. Pick your spots – choose a private setting where you won’t feel rushed or be interrupted.
3. Start small – build confidence and conversational momentum by capturing what’s already been done (win!) and breaking up the process into smaller steps.
4. Stay onside – frame the discussion in terms of common goals like maintaining independence.
5. Bring lessons learned to life – use the process of working with a loved one to examine your own plans and readiness for the MTM.

Moments That Matter Do’s and Don’ts

Do

• Approach as a partnership between you, your loved one and your family.
• Use “we” statements – you’re not doing this to your loved one, you’re doing this together.
• Agree to disagree, but don’t stop talking.

Don’t

• Take it personally – MTM can trigger old family dynamics.
• Try to tackle everything – start small and celebrate success.

“It’s important to recognize that family conversation conflict is likely, but it’s not insurmountable,” says Suzanne Schmitt, Managing Director at Next Chapter. For advisors tackling family conversations for the first time, Schmitt suggests this 3-step approach:

1) Set the date – treat MTM conversations like you would a key business meeting

2) Problem solve – anticipate and prep for conversational derailers

3) Practice – make notes, bounce ideas off a trusted advisor and practice your thoughts out loud

Tread Lightly During the Holidays

The holiday season can present a unique opportunity for financial advisors to connect with clients about important family matters. However, as Steve Gresham, founder of Next Chapter, advises, it’s essential to tread carefully. "While the holidays are indeed an opportunity, don’t risk spoiling the event. Your intended audience may not be ready, willing, or able!" he says. Instead of raising sensitive topics during the celebration, consider leveraging the post-holiday period for a follow-up conversation. This approach allows you to frame your discussion within the warm spirit of the holidays while maintaining focus on key issues.

Gresham suggests initiating the conversation with a thoughtful message, such as, “It was wonderful to be with you during the holidays – such a special time for our family. And in that spirit, I wanted to talk to you about something.” From there, ensure the dialogue is well-organized and matter-of-fact. To keep emotions in check, advisors should consider several critical elements: What is the motivation for having this conversation now? Did a recent event prompt the need for action? Who needs to be involved, and how can the group show unified support without overwhelming the individual?

Gresham stresses the importance of keeping the group small, ensuring all participants are informed and aligned, and avoiding the tendency to assume the full burden alone. He also shared his own intergenerational story with his Mom.

The goal of these conversations, Gresham explains, should be to achieve small, meaningful wins that pave the way for more significant progress later. Advisors should be prepared with clear options and a manageable first step, supported by relevant research or information. Setting a specific timeline for action is also crucial to maintaining momentum.

"What I do with my family and friends seemingly every day is apply these principles," says Gresham, emphasizing the importance of clarity and thoughtful planning. By guiding clients through these structured and supportive conversations, financial advisors can help families navigate sensitive topics with care and confidence.

Related: Family Emergencies: How Advisors Can Help Ease the Pain