Teaching heirs about wealth stewardship

With trillions in global wealth expected to transfer to younger generations in the next two decades, more families are being encouraged to prepare their children to manage money responsibly.

Filipinos with long-running businesses or high-value assets are beginning to take a more active role in preparing their children for future responsibilities. More parents are now working with wealth advisors, enrolling their children in financial literacy programs, and using bank services that focus on long-term wealth planning.

Fortunes do not last

Many may consider estate planning taboo. In most cases, the topic is only brought up when something urgent happens, such as illness or death. By that time, experts say, it may already be too late to make clear and informed decisions.

Experts believe parents should gradually involve their children in conversations about family assets, trusts, and business operations.

Local financial advisors and private banks are also offering customized programs for families who want to build a long-term financial plan that includes their heirs.

Teach, talk, and practice

Financial experts say managing wealth takes years of planning and consistent involvement from both parents and children. Instead of waiting until adulthood, families are encouraged to begin financial education early and treat wealth as a shared responsibility.

Start teaching early

Experts first recommend starting with the basics. Instead of immediately introducing children to stocks or trust funds, parents can begin by showing them how to budget, save, and plan small purchases that can come from simple day-to-day activities.

Mobile banking applications, budgeting platforms, and online games allow children to test their decision-making. Parents can use these tools to guide their children, observe their habits, and decide when to give more responsibility.

In more financially active families, children are invited to sit in during family business meetings or talk to lawyers and accountants. These experiences, even as observers, help the next generation understand the importance of good decision-making.

Treat wealth as a shared responsibility

Handling family finances should involve everyone, not just one decision-maker. Professionals say that involving children in financial conversations helps them feel responsible and informed.

Involving children in conversations about money makes them feel part of the process. Experts believe families that hold regular meetings to review their financial goals are more likely to stay aligned over time. These sessions give heirs a chance to ask questions and build their understanding.

To keep expectations clear, some families use guides to lay out rules, explanations, and plans. For example, a family constitution might explain how the money should be used, what behaviors are expected from heirs, and what steps to take during disagreements.

Keep talking about wealth

Experts agree that silence is one of the biggest threats to family wealth. If children are kept in the dark about family finances, they might make wrong assumptions or feel anxious. Wealth education, they say, should not be treated as one-time talk, but a continuous process that evolves as children grow older and become more involved in decision-making.

Tap the right experts

Wealth management goes beyond saving and spending, as it includes tax planning, legal matters, and family dynamics. Many families now work with professionals like estate lawyers and financial advisers to help manage these responsibilities.

In some countries, some family offices even hire communication coaches or education officers. In the Philippines, this setup is still new, but experts say families who mix legal advice with guidance tend to do better over time.

Give heirs room to learn

Parents protecting children from financial loss is common, but financial experts say small mistakes are part of the learning process. Giving children money to manage and a room for growth can help them build confidence and learn decision-making.

Some experts suggest giving young family members a small allowance to manage on their own. Others recommend letting them invest in a simple project or donate to a cause. The key, they say, is hands-on learning.

Families who take a gradual and hands-on approach are more likely to protect their legacy across generations. Professionals emphasize that wealth stewardship should focus on preparation, and that preparation should start sooner.

(Editor’s Note: This article is part of a special collaboration between Metrobank and BusinessWorld. Our aim is to explore the facets of living well for Wealth Insights readers, who value the finer things in life. From discerning choices in cars, dining, and travel to appreciating exquisite jewelry and, ultimately, the journey toward building a legacy.)