Focus on Passing Down Your Values, Not Money
Like Beau Bridges in 'The Goodwin Games,' parents can create a valuable legacy by telling their grown kids what they care about most
The Goodwin Games, a new Fox TV comedy starring Beau Bridges, is a little wacky but it makes a vital personal finance point between laughs: Parents should ensure their children will inherit their estates as they wish, of course, but it’s equally important – maybe even more important – that they pass on their values.
How are you doing on that score?
An intriguing finding that caught my eye in the recent survey of people over 45, Americans’ Perspectives on New Retirement Realities and the Longevity Bonus, from Merrill Lynch and the Age Wave consulting firm, really underscores this view.
(MORE: How to Be a Role Model to Your Adult Children)
Instilling Values Matters Most, a Study Finds
When asked “What’s most important to pass on to the next generation?” the No. 1 answer, offered by 74 percent of respondents, was: “Values and life lessons.”
The answer “financial assets or real estate” came in last. In between were “instructions and wishes to be fulfilled” and “personal possessions of emotional value.”
When I spoke with Chris Heilmann, chief fiduciary executive of U.S. Trust, about passing down values as a key part of your legacy, he said: “I’ve been in this business for 41 years working with families, and from my experience, if wealthy people are faced with a choice of being able to hand down their money or their values, but not both, they’d want to hand down their values.”
What the Wisest Americans Say
Similarly, Cornell University gerontologist Karl Pillemer, who interviewed more than 1,200 Americans mostly 70 and up for the Legacy Project and his book 30 Lessons for Living: Tried and True Advice from the Wisest Americans, told me: “We found that many of the elders see transmitting their values and core principles as their most important legacy.”
One lesson for parents, Pillemer said, was to “be sure to communicate your values to your children and to bring them up to appreciate having very clear principles for living.” (You can find examples of their principles for living a good life at the Legacy Project website’s Lists for Living section.)
How 'The Goodwin Games' Dad Did It
In The Goodwin Games, created by the people who brought us How I Met Your Mother, Bridges’ character – patriarch Benjamin Goodwin – is trying to do just that, albeit a little late.
At the reading of his will, his three estranged grown children watch the first of a series of videos the former math professor has made saying they’ll inherit his $23 million estate only if they “demonstrate good judgment, live up to their potential and be the people they still can be.”
Chris Harris, the show’s executive producer and co-creator, told me: “His goal is to parent them from beyond the grave and the last tool in his arsenal is his inheritance.”
(MORE: How to Talk With Your Adult Kids About Their Inheritance)
I asked Harris how his parents instilled their values. “I remember them stating very clearly a few times, both in person and in letters, ‘These are the things we hope for you,’” he said.
Harris doesn’t necessarily recommend using a video will to pass on your values, though. “I’m torn about that," he said. "I want to say it’s a terrible idea, but my show depends on it.”
Alternatives to the Video Approach
Experts in the field of legacies and estate planning say a video can be one way to get your values across, but there are other options that can be much better, particularly because they're done with your kids before you die.
“It’s really about which medium the parent feels most at ease with,” said George Kinder, a financial planner, tax adviser and founder of the Kinder Institute of Life Planning in Littleton, Mass.
Creative individuals, he noted, could create a collage or slide show combining images, text and even music. If you’re interested in going this route, Kinder recommends using the website Yourafterlife.com.
You could also put your deepest values and moral principles down on paper (or electronically) by writing a “legacy letter” or an “ethical will,” whose origin dates to the story of Jacob in Genesis.
But for most of us, face-to-face, two-way conversations work best. “That way, family members know that their opinions count for something,” Heilmann said.
Going the Formal Route
You could choose to have a formal values talk with family members, perhaps during a Thanksgiving gathering (just not during the meal).
(MORE: Sandwich Generation: No Money Talk at Holiday Table, Please)
In this meeting, Heilmann said, the matriarch or patriarch might say something like: “Let me share with you how I’ve thought about what’s important to me in the culture of our family.” Then, he added, ask your grown children: “Does this make sense to you? Do you agree with me?”
If being charitable is a high priority to you and you want your kids to help the needy, too – 65 percent of high net worth adults just surveyed by U.S. Trust said they’d rather their children grow up to be charitable than wealthy – you might all pool together $5,000 or more and put it into a Donor Advised Fund, a tax-favored vehicle offered by such financial powerhouses as Fidelity, Schwab and Vanguard. (The Next Avenue article “Donor-Advised Funds: Timely, Tax-Saving Way to Give to Charity” can tell you more about this.) You'll want to appoint one or more members of your family to be in charge of managing the fund after you're gone.
Bringing In a Pro
If you like the idea of having a "big talk" but don’t want to disrupt the holidays, you might instead hold a meeting outside the home and bring in a life planner professional to help run it.
“Life planners typically combine financial planning skills with great listening and relationship skills,” Kinder said. “They’re trained to bring out and discover what’s most inspiring and meaningful” to you then provide the “financial architecture” to help pass this on to your children. Kinder’s site has a directory of 300 registered life planners and 2,000 other life planning professionals.
Going the Informal Route
Alternatively, you could do what I try to do with my grown sons, Aaron and Will: look for ways to subtly drop hints about your values when talking with your grown kids and act as a role model, so they can pick up your values by watching what you do.
Financial writer Jeff Brown, who discussed this method in his Next Avenue article “Sandwich Generation: The Money Habits We Inherit,” said one way to do this is by telling your kids who you admire and why.
If you think managing your money wisely is important (you do, right?), explain to your grown children how you do it – that you make an annual retirement plan contribution, that you’ve just found a way to slice expenses without a huge sacrifice, and so on. There’s no need to cite actual numbers. You’re trying to instill habits and values; the dollar amounts are irrelevant.
Passing On Values Can Be Tough
Talking about your values to your adult kids, whether you do it formally or informally, isn’t as easy as writing a will to lay out who’ll get how much money and the family heirlooms.
“It can be a scary thing,” Harris said, “because it involves looking at your own life and asking questions like: ‘Am I actually living according to the values I believe in myself?’”
That’s probably why Benjamin Goodwin couldn’t do it before he died.
There’s one thing I’m still wondering about, though: How does a math professor like Goodwin accrue $23 million?
“We hope there will be lots of other people who’ll ask that same question and continue to watch The Goodwin Games to look for the answer,” Harris said. “We’ve gotten pretty good at stringing along mysteries in How I Met Your Mother, so keep watching.”