© 2024 M&T Bank and its affiliates and subsidiaries. All rights reserved.
Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation including, but not limited to, Manufacturers & Traders Trust Company (M&T Bank), Wilmington Trust Company (WTC) operating in Delaware only, Wilmington Trust, N.A. (WTNA), Wilmington Trust Investment Advisors, Inc. (WTIA), Wilmington Funds Management Corporation (WFMC), Wilmington Trust Asset Management, LLC (WTAM), and Wilmington Trust Investment Management, LLC (WTIM). Such services include trustee, custodial, agency, investment management, and other services. International corporate and institutional services are offered through M&T Bank Corporation’s international subsidiaries. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank. Member, FDIC. 
M&T Bank Corporation’s European subsidiaries (Wilmington Trust (UK) Limited, Wilmington Trust (London) Limited, Wilmington Trust SP Services (London) Limited, Wilmington Trust SP Services (Dublin) Limited, Wilmington Trust SP Services (Frankfurt) GmbH and Wilmington Trust SAS) provide international corporate and institutional services.
WTIA, WFMC, WTAM, and WTIM are investment advisors registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, WTAM, and WTIM is also available on the SEC's website at adviserinfo.sec.gov. 
Private Banking is the marketing name for an offering of M&T Bank deposit and loan products and services.
M&T Bank  Equal Housing Lender. Bank NMLS #381076. Member FDIC. 
Investment and Insurance Products   • Are NOT Deposits  • Are NOT FDIC Insured  • Are NOT Insured By Any Federal Government Agency  • Have NO Bank Guarantee  • May Go Down In Value  
Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any security or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance that any investment, financial or estate planning strategy will be successful.

Responsible children in their twenties and thirties may be ready to become full partners in your family’s financial life.

Many parents worry that sharing details about their family’s finances with children in their twenties and thirties will reduce their motivation, just as they are launching their careers. Keeping grown, responsible children in the dark about family wealth can do more harm than good, however. The reason: It is generally much easier for young adults to become financially responsible when money matters are discussed openly and education begins early.

How can you educate your children without overwhelming them or revealing more than you would like? Young adults do not need to know the exact value of family assets to learn the basics of wealth management and become involved in the family’s financial activities. To get started, outline the basic concepts you want them to learn. You might wish to include the following:

Financial planning. Every young person needs a basic framework to help them make responsible decisions about spending and saving. It is particularly important for children of affluence. While those of lesser means may base spending decisions on their financial resources, those with seemingly limitless resources may have difficulty deciding how much spending is appropriate. Consider asking one of your family’s financial advisors to draw up a first financial plan for each child.

Investing fundamentals. A good place to begin an investing discussion is with an explanation of the three basic asset classes—stocks, bonds, and cash— and the concept of asset allocation. If your children are already familiar with these topics, now is the time to introduce more complex ones, such as alternative investments. Consider sharing some basic information about the structure of your family’s portfolio.

Estate planning basics. Because many estate plans often include trusts, you might start there. A young adult should understand that a trust is an instrument created by a grantor (often parents or grandparents) and held by a trustee (often a financial institution) for a beneficiary (often children or grandchildren). To make this conversation relevant, you might begin by discussing the structure of any trust vehicles for which he or she is the beneficiary. If you wish to explain different types of trusts— such as dynasty or charitable trusts— it’s usually a good idea to bring in advisors that can assist with the discussion.

Taxes. It is crucial to communicate the importance of tax-efficient wealth management and the fact that the tax law landscape is ever changing. You can teach young adults about the investment and trust instruments that exist to help protect capital from erosion caused by taxes. Additionally, you might wish to explain current tax rates for earned income, capital gains, dividends, and estates.

Legal concepts. It is important that affluent young adults understand the concept, and relevance, of prenuptial agreements. It is easiest to have this conversation before a grown child meets his or her future spouse. Your young adult children are also old enough to begin learning about other basic contracts, such as partnership agreements for business ventures. The message: Make sure family members and advisors have a chance to review these documents prior to their execution.

Philanthropy. Although philanthropy is much more than a financial topic, it is important that young adult children understand the tax benefits they may receive for giving and how philanthropy can be an integral part of estate planning. Beyond that, you might consider inviting your children to help lead your family’s philanthropic efforts. If you have a private family foundation, consider asking your children to sit on the board. This can also be a great way to pass on family values and help them develop leadership skills.

Getting started

If your children are still living at home, you can start addressing these topics during dinner or whenever you are together as a family. If your children are living on their own, consider scheduling a family retreat with your advisors. This gives you an opportunity to get together and allows younger family members to meet family advisors in a relaxed setting. Keep in mind that these conversations will be most successful when tailored to the age, interests, and knowledge of each child. If your daughter is studying to become an estate planning attorney, you might wish to share intricate details of your family’s wealth transfer strategy. If your son is a social worker, he might be more interested in the family’s philanthropic mission. And remember: These discussions are likely to reap rewards that are more than material. Educating children about important subjects and empowering them to make wise decisions can build trust and strengthen familial bonds.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.

Investing involves risk, and you may incur a profit or loss. Diversification does not ensure a profit or guarantee against a loss. There is no assurance that any investment strategy will succeed.

Disclosures:

    • © 2024 M&T Bank and its affiliates and subsidiaries. All rights reserved.
    • Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation including, but not limited to, Manufacturers & Traders Trust Company (M&T Bank), Wilmington Trust Company (WTC) operating in Delaware only, Wilmington Trust, N.A. (WTNA), Wilmington Trust Investment Advisors, Inc. (WTIA), Wilmington Funds Management Corporation (WFMC), Wilmington Trust Asset Management, LLC (WTAM), and Wilmington Trust Investment Management, LLC (WTIM). Such services include trustee, custodial, agency, investment management, and other services. International corporate and institutional services are offered through M&T Bank Corporation’s international subsidiaries. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank. Member, FDIC. 
    • M&T Bank Corporation’s European subsidiaries (Wilmington Trust (UK) Limited, Wilmington Trust (London) Limited, Wilmington Trust SP Services (London) Limited, Wilmington Trust SP Services (Dublin) Limited, Wilmington Trust SP Services (Frankfurt) GmbH and Wilmington Trust SAS) provide international corporate and institutional services.
    • WTIA, WFMC, WTAM, and WTIM are investment advisors registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, WTAM, and WTIM is also available on the SEC's website at adviserinfo.sec.gov. 
    • Private Banking is the marketing name for an offering of M&T Bank deposit and loan products and services.
    • M&T Bank  Equal Housing Lender. Bank NMLS #381076. Member FDIC. 
    • Investment and Insurance Products   • Are NOT Deposits  • Are NOT FDIC Insured  • Are NOT Insured By Any Federal Government Agency  • Have NO Bank Guarantee  • May Go Down In Value  
    • Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any security or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance that any investment, financial or estate planning strategy will be successful.

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