There is a conversation most families never get around to having. It goes something like this: Mom or Dad has spent decades building something: a business, a portfolio, a family legacy. And at some point, someone needs to ask who takes over.
Wealth advisors and estate attorneys told CNBC that relatively few families are actually having this conversation. And waiting too long can cost everyone, financially and emotionally.
The cost of waiting
Scott Rahn, a trust and probate attorney at RMO LLP, has watched inheritance disputes multiply as families grow wealthier and people live longer. Both of those things also raise the chances that someone in the family will develop Alzheimer’s or another condition that affects judgment.
“Most of the matriarchs and patriarchs who create family wealth are strong personalities,” Rahn said. “They’ve done great things, they’ve created this wealth, they’ve created dynasties. Now you’re coming face to face with the reality that despite all of their accomplishments, they’re human. That can just be emotionally difficult for families.”
Family businesses can build legal safeguards into their structure, things like mandatory retirement ages or mental capacity evaluations. But Rahn said the legal language only goes so far. How families talk about it matters just as much.
Four Ways to Make the Transition Smoother
Advisors across several major wealth management firms offered four pieces of practical guidance. Here is what they said.
1. Start talking before there is a crisis
The biggest mistake families make is waiting for a stroke or a serious disagreement before the subject comes up, according to Mallory Findley of Rockefeller Capital Management. By that point, trust may already be broken.
“The better approach is to begin while everyone is capable of participating really thoughtfully, as we like to say, while they’re happy and healthy and here,” said Findley, the firm’s head of family dynamics and financial education.
Major life events like selling the family business or having a new grandchild can be natural moments to start that planning, she said.
BJ Goergen Maloney, global head of J.P. Morgan Private Advisory, noted that families who talk regularly find these harder conversations easier to have. “If you don’t have a cadence of talking about things, even if it’s a couple of times a year, it’s really hard to have those conversations,” she said.
And the setting does not need to be formal. “A family meeting can be dinner on Sunday night,” Maloney said. “It doesn’t have to be complicated.”
2. Make the transition gradual
If you notice signs of cognitive decline in a parent, advisors say it is worth getting a health evaluation sooner rather than later. But the handover of financial responsibilities should not happen overnight.
Valerie Galinskaya, head of the Merrill Center for Family Wealth, described one case where a client was concerned his mother, who managed multiple properties, was no longer as sharp as she had been. Rather than making it about the mother’s abilities, Galinskaya reframed the discussion as financial planning for the whole family.
“We reframe it as not taking the reins away but asking who is the right individual holding the reins for individual decisions at hand,” she said.
Dan Griffith, director of wealth strategy at Huntington Bank, added a caution for adult children who move too quickly. “One of the sad scenarios I’ve seen is that you’ve got overbearing kids who drive their parents away. When they do that, they’re driving their parents into the arms of somebody who potentially could take advantage of them,” he said.
3. Treat the person stepping back with real respect
Mark Parthemer, chief wealth strategist at Glenmede, put it plainly: “A lot of their self-identity is invested in that role. They’ve been the key person. They’ve been the person everyone relies on, and so we should be delicate about removing them from that role.”
He described one family he advised that chose to “promote” the patriarch from president of the company to chairman of the board. It gave the father a way to stay involved by attending strategy meetings and weighing in, even as day-to-day responsibilities shifted.
When staying involved in the business is not an option, Findley suggested families talk openly about what else a senior member contributes. “Our process is really to help families recognize that every family member brings value beyond financial contribution,” she said. “For the senior generation, oftentimes that looks like wisdom, family history, emotional steadiness, mentorship, or even just the ability to keep people in the family really connected.”
4. Get the siblings on the same page first
When adult children are involved, it is rare for all of them to see things the same way, according to Galinskaya. Often one child lives closer and is more aware of a parent’s declining health, while others are less informed or not yet ready to face it.
She recommends building consensus among siblings before bringing the subject to a parent. She also suggested setting ground rules for family meetings, such as keeping spouses or partners out of the initial discussions and having family members complete confidential questionnaires beforehand about their goals and concerns.
Rick Pitcairn, chief global strategist at Pitcairn, said the goal of these meetings is not unanimous agreement. It is understanding. “If they understand why they were made, and the person says this is why I made this decision, they’re pretty accepting of those decisions,” he said. “If they don’t, then they start to accuse people of things that they probably didn’t do, and there’s mistrust and dysfunction.”
The bottom line, across all these experts, is the same: the sooner your family starts talking about this calmly, while everyone is well, the less likely it is to become a crisis later. The conversation is not about taking something away. It is about protecting what was built.
