Advisors should keep those values as the centerpiece and apply a few central guidelines to make the inheritance conversation an effective and positive experience.

Know The Family
The ground covered by parents and children will be vastly different from family to family. Advisors must have a thorough knowledge of their client in order to generate an agenda that will help steer the conversation in the right direction. They should also be certain that they and the parents understand details such as the family’s financial situation, the work it took to generate and grow the assets and the distribution plan. Each of these elements can have a profound impact on how children react.

Certainly, there is the potential for uncomfortable situations. For example, parents may believe their children are not aligned with their values and fear additional money will hurt them more than help. Children may be surprised to hear that nothing is coming their way—or that they will receive assistance but it will not be a “life changing event.”

The talk may also broach sensitive issues, such as substance abuse or lifestyle concerns. While the parents handle the emotional connection in these matters, an advisor can provide a more formal look at how financial distributions can be tied to behavioral benchmarks.

Before the meeting, advisors should outline with the parents any potential issues and have a clear strategy for how to address them, with agreed-upon phrasing and information during the meeting and the right follow-up in subsequent weeks.

Emotional And Practical Preparation
The talk should be developed as a formal meeting—it is not a conversation best served with a holiday dinner. Advisors can work with the parents several weeks before the talk is scheduled to establish goals, an agenda and a strategy.  

Walking through the process and potential pitfalls based on known family dynamics is a useful practice. In fact, role-playing with the parents to test their responses and level of comfort is an excellent way for advisors to identify sensitive areas that may not readily appear on the surface.

Projecting a sense of confidence and organization also goes a long way to setting minds at ease. Families will want to demonstrate that plans for their wealth have been well thought out, professionally drafted and are part of a multigenerational strategy.