What Does Passing on Values to the Next Generation Really Look Like?
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Excerpted from Wealth of Wisdom: The Top 50 Questions Wealthy Families Ask, published by John Wiley & Sons, Ltd. Copyright © 2019 Tom McCullough and Keith Whitaker. All rights reserved.
If you are reading this chapter in hopes of obtaining strategies and ideas on how to have your children and grandchildren embrace many of the same life priorities and values that you have, you are not alone. I have worked with very successful and affluent families for more than 25 years and the issue of passing on values is among the most frequent topics on which I am consulted. The process of deeply understanding your own values, being intentional about how to instill some of those in your children, embracing their unique values, and taking the many steps necessary to create a legacy is indeed a life’s work.
During these many years, and through the candidness of my clients, I have learned five important lessons about values transmission:
- Values are caught, not taught.
- Values are different than beliefs, preferences, choices, and principles.
- Leading a life that is consistent with one’s values is the greatest predictor of happiness.
- Storytelling is a powerful means of sharing values.
- If the family is to flourish for multiple generations, the attention to human capital should be as serious as that to financial capital.
Values are caught, not taught
We all heard as children that “actions speak louder than words.” That turns out to be true. Our values are on display every day, in so many ways, for our friends, family, and community to observe. We demonstrate our values most clearly in the ways we choose to spend our time, our money, and our energy. Families often decide to develop a family mission statement or family values statement. They hope that these documents will teach the future generations what is important to them, what the family legacy is, and what values they hold dear. Such formal statements may help the family crystallize its thinking. But what many thoughtful, committed families have discovered is that what is most meaningful is how you actually live your life, not what can be communicated in a written document.
Children are keen observers. They watch their parents, they listen to their interactions, and they have an almost unerring ability to discern dissonance between what their parents say and what they do.
As adults, we unmistakably demonstrate – in large ways and in small, seemingly inconsequential ways – through our actions who we are, what we truly believe, and what is really important to us.
Our core values are revealed for example, not just through the philanthropic passions we pursue but in how we treat others, the time and devotion we give to our family, the generosity of spirit we show to friends, family, service providers, and others and the priorities we make clear to others. Dr. R. Kelly Crace, of Duke University, author of the Life Values Inventory (www.lifevaluesinventory.org) and a highly respected researcher on values and life satisfaction, says that “If I followed you around for three weeks I could tell you exactly what your top five values are.” He believes that it is not what we say we care about, but rather what we do that most clearly and accurately informs others about our values.
Parents who are clear about the values that matter most to them are also more able to be intentional about passing on those values. Their words and actions are consistent. This enables them to communicate the connection between their specific values and the actions they believe will effectively promote those values.
For example, parents who wish to pass on the value of responsibility create opportunities for their children to be dependable and accountable. Families who wish to pass on the value of productivity create real work experiences (e.g. expecting children to work for non-family employers).
Wealth can bring with it a sort of gravitational pull – an energy around the money and privilege that is powerful and frequently distracting. Too often, children in affluent families have few household chores, no summer jobs, and few consequences to their actions. Jobs that do exist may be obtained through parental connections and children may lose the value of external, objective feedback. Summers may be used for travel, vacations, and camp, which can be wonderful experiences, but children then miss the opportunity for employment. It is no surprise then that parents experience an uncomfortable disconnect between their own values of productivity, responsibility, and hard work and the values that their children display.
Parents who wish to pass on the value of commitment must commit to keeping their children engaged in activities long enough for them to experience a sense of satisfaction. Dr. Edward Hallowell, author and noted expert on attention deficit disorder and parenting, points to this experience in his book The Childhood Roots of Adult Happiness. Dr. Hallowell observes that children must have the opportunity to explore various activities, choose those that are interesting to them, practice them to proficiency or mastery, and then be recognized, even in small ways, for that skill. Affluence may make children more comfortable quitting a sport or music lessons than middle-class children would, for whom the financial costs of these activities are more meaningful.
If parents hope to raise children who are productive, motivated, grounded, and compassionate, as I believe most do, then actions that foster those values must occur consistently throughout the child-raising years.
Values are different from beliefs, preferences, and choices
Values are the compass that each of us uses to direct our behavior, often unconsciously. They are the core defining elements of our being, without which we are not ourselves. They are the organizing principles of our lives.
You will likely pass on money rather than values unless you 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. For example, someone who passes on the value of compassion and service will likely also pass on assets to charity. Someone who passes on the value of hard work to their children likely will not create an estate plan that allows the heirs to live a life of idleness. Those who believe in generosity will be generous to their family and the world, whereas those who possess a less generous spirit might be more controlling and less able to help their children learn the joys and value of sharing their wealth responsibly.
People often use the term values to describe what really are beliefs, choices, or preferences. For example, spirituality is a value; the preference or choice may be Christianity or Judaism. A value is community service and civic engagement; a preference or belief may be conservatism or liberalism. Generosity is a value; a preference is environmental conservation or the arts. Families often experience great concern that their deepest values are not being embraced by the next generation, when indeed the value is embraced, but the expression of that value is different. This is not to say that troubling values are not a real cause for concern – they are. But varying expressions of the same values are healthy for the individual’s own development.
Successive generations often struggle to find a sense of their own identity in wealthy families – a sense that they themselves are unique and wonderful in the shadow of a highly successful parent or grandparent. The more that these children and grandchildren can be honored and valued within their families for their own characteristics, beliefs and choices, the happier and healthier not just the individual is, but the whole family system. Those families who have a rigid definition of “who we are” often, sadly, find the younger generations creating distance and making choices that do not promote family unity in an effort to have some individuality. For some wealthy families, the notion of a common and narrow definition of family identity is deeply important, and, sadly for some, it is tied to the transmission of money. On the other hand, families who respect real differences and foster a sense of inclusion in the family find that their families are not only richer in character but also tighter and more committed through the generations. If family unity is a strong value for you, inclusion and acceptance are important allies.
Leading a life that is consistent with your values is the greatest predictor of happiness
Most thoughtful research shows that one of the most important predictors of happiness is the congruence of one’s life with one’s values. Dr. Crace has shown in study after study that when people live a life aligned with their four or five core values they are happy, healthy, and resilient. When you act on your values, you feel satisfied. When you do not, these same values become a source of frustration and stress. They create a bond when they are shared, and they can be a point of contention when family members, friends, or colleagues have different core values.
Clarifying your personal values is the starting point for understanding what you want your legacy to be. Understanding your children’s values can increase the chances that you will pass your legacy on in a way that is meaningful to you and to them.
Values are frames and filters for behavior and communication, and staying values-focused supports healthy parenting. So, why then is passing on values such a complicated process? The most frequent problems that parents face are the following.
Loss of focus on their own values
A life of privilege and wealth can be highly distracting for some people. These individuals may lose sight of what truly matters to them in the face of almost limitless choices. In the end, when options are so abundant, values are one of the only effective ways of narrowing the choices and leading a life that reflects your values. Families of real abundance have the opportunity to live a life that is fully reflective of their values, unlike those with financial constraints that dictate how they spend their time and available resources.
Conﬂicts of values that they need to resolve
Parents can help their children understand their struggles to balance multiple and sometimes competing values. For example, a values conflict might exist between a goal of financial success and family unity. To have financial success, a parent must often spend significant time away from the family. This values conflict may be misunderstood by others. Often, spouses and children see the value one places on financial success or productivity as being the guiding principle of an entrepreneur’s life, but to family members it feels like it impedes family togetherness and well-being. Values conflicts such as these have the potential to send mixed messages to children about what’s really important. This is a frequent issue in families of wealth.
Understanding that teenagers have a developmental need to challenge their parents’ values
This is a healthy and normal part of child development, and parents are rewarded for patience and perspective during the trying teenage years. Differences in values are not a problem. The key is how these differences are played out. When parents have what appears to be a conflict in values with a child, they should ask: Is the conflict a sign of lack of respect for the parents’ values, or is it problematic behavior? In general, children are not equipped to know how to express values or how to act on them. Parents who have thought about their own values can help their children develop the skills to communicate effectively about their own values.
Helpful questions to ask yourself, as a parent, include the following:
- What values did I have when I was younger?
- How have these values changed over time?
- What are the values that my children hold?
- How are they the same or different?
You might also want to examine these:
- What is the current state of my relationships with my children?
- What do I want these relationships to be?
Communicating values to children entails:
- Knowing your values
- Managing your fears
- Being neutral and able to accept your children’s different values.
Storytelling is a powerful means of communicating your values
Legacy is more than financial inheritance. Its definition includes anything handed down from the past as from an ancestor or predecessor. Your legacy – and your values – are more powerfully conveyed by telling personal stories than through legal documents.
Telling stories is an opportunity to see your own life more clearly in terms of what’s most important to you, what your values are, and to live your life more fully according to and in alignment with these values.
When we tell our stories, we are offering three invaluable gifts to the next generation:
- We are giving them a better understanding of who we are and the forces that shape the values we’re trying to transmit.
The person hearing the stories receives a more complete picture of the parent as person; the teller can be seen not only as a parent, but also as a child, entrepreneur, adventurer, a learner, someone who has struggled and is making his or her way. The stories offer a broader perspective to the next generation, grounding the teller/parent and his/her values in a context.
- We are giving them an opportunity to explore who they are and how they want to form their own journey.
When we hear a story, we project ourselves into it; we imagine ourselves there, we identify with the hero, and we make connections to our own lives and experiences. In this act of listening, members of the next generation can imagine their own stories projected on the template of the parent’s story. It offers them an opportunity to discover how they are similar or different or both, and ways they wish to emulate or ways that they wish to diverge from their parent’s journey.
- We are giving them the tools to continue passing on the family’s legacy. By modeling the act of telling a story, we are teaching the next generation the importance of stories and legacy. They will learn to value the family legacy and be able to continue telling the stories themselves.
In this way the family legacy is preserved and passed on through the generations.
If the family is to flourish for multiple generations, the attention to human capital should be as serious as that to financial capital
Successful families often spend much of their time worrying, planning around, and attending to their financial assets. They hire and retain a team of experts to help them successfully manage their financial wealth. They spend many days each year attending to the successful management of their money. Additionally, they give much time and thought to how they will pass on that wealth.
Fewer families attend with the same intensity, energy, and commitment to the human assets of their families: the family members. And if a family is to flourish for many generations and the wealth is to be useful means for the family members in attaining happiness and accomplishment, it is exactly that kind of attention that is needed.
I have come to believe that the most important job of the second generation and beyond is to develop human capital with the same energy and intention that the first generation created the financial capital. To do this intelligently and successfully, these generations must work hard to maintain healthy family relationships, use their financial resources to enhance the life experiences and opportunities of each member of the family, welcome and integrate spouses into the family, identify and encourage the gifts that they each bring, and, lastly, develop practices and policies that create healthy connections and decision-making.
Each and every healthy multi-generational family accomplishes this task in some way. In every case, a family member, or group of family members, deeply devoted themselves to creating a healthy, committed, and vibrant family. Those family leaders acquired training and skills to assist this effort in one way or another and encouraged the robust connectivity of the family in real and meaningful ways.
The transmission of values to the next generations is indeed important life’s work. Many parents, regardless of financial circumstances, worry about how to do this well. Although wealth brings with it a plethora of opportunities, it also brings with it complicating elements in the passing on of good values. Wealth allows for wonderful educational opportunities, travel, broadening experiences, and access to enriching people and choices. It also creates the possibility of entitlement, overindulgence, lack of motivation, and focus on materialism. Some successful parents overload their children with activities and too much pressure to succeed.
The nurturing of good values, regardless of whether or not they happen to be those of the parents, is vital work that is essential to the flourishing of a family for multiple generations. When wealth presents challenges, it is all the more important to be thoughtful and intentional about this process. The rewards that your family will reap are real and immeasurable. Good values are the most important asset you will ever leave your children and the best estate planning tool you will ever discover.
Questions for further reﬂection
- What, in your view, are the most important values that you were brought up holding?
- What would you say are the values that your children have learned from your deeds and words, including stories?
- What steps could you take to engage your children in a conversation about your respective values, shared and different?
Ellen Miley Perry, A Wealth of Possibilities: Navigating Family, Money, and Legacy
(Washington, DC: Egremont Press, 2012).
Ellen Miley Perry is the founder and principal of Wealthbridge Partners, LLC. She has 30 years of experience serving as a strategic advisor for families of substantial wealth. During this time, she gained perspective on the many ways wealth affects families, and she developed expertise on practices that substantively enhance the life of a family and its individual members. From advice and counsel to the business founder to work on governance, succession planning, joint decision-making, conflict resolution, and next-generation flourishing, she brings wisdom, practicality, creativity, and a sense of possibility to the families with whom she works.
Before founding Wealthbridge Partners, Ellen was the co-founder and CEO of Asset Management Advisors (now GenSpring Family Offices), a multiclient family office, and Teton Trust Company, its affiliated private trust.
Ellen, author of A Wealth of Possibilities – Navigating Family, Money, and Legacy, is a frequent speaker, author, and advisor on strategies that create and sustain great families throughout multiple generations. Her work and opinions have been quoted in numerous publications including the Wall Street Journal, the New York Times, and Fortune Magazine, as well as in several books by other authors.