Preparing Your Children Isn’t the Problem. Avoiding It Is.
Why silence, not wealth, creates entitlement and how to raise capable stewards of your family’s legacy
What We Get Wrong About Entitlement
Many business owners and high net worth individuals approach wealth planning with one major fear: “I don’t want my kids to feel entitled.”
It’s an understandable concern. You’ve worked hard to build something lasting. You want to protect it, not just from taxes or bad investments, but from misaligned values in the next generation. But here’s the truth: preparing your children or communicating that you intend to pass down wealth doesn’t cause entitlement. Entitlement is a state of mind that is fostered over time. Not one act makes your kids behave entitled, but avoiding the challenge of preparing them can.
Entitlement is not the result of access or of living a particular lifestyle. It results from exclusion, silence, and a lack of learning opportunities. And while avoiding the conversation about the transfer of wealth may feel like caution, it often has the opposite effect; it leaves children uninformed, emotionally disconnected, unprepared to handle what’s coming and lacking an appreciation for what they are receiving.
This article isn’t about spoiling the next generation or surrendering control. It’s about something much more disciplined: treating preparation for wealth transition like you treated business building, with intention, structure, and long-term thinking.
The Sacrifices They Already Made
If your children grew up while you were building your business, they were part of the journey, even if they never set foot in the office.
They sacrificed alongside you. They missed time with you, you missed their events, they adapted to the stress you brought home, and grew up in the shadow of something demanding and important. Your success didn’t happen in isolation. It happened around them, and often, at a cost to them.
So when the business is sold and a liquidity event occurs, the proceeds don’t arrive in a vacuum. They come with history and, in many cases, expectations. Acknowledging your children’s role and sharing the rewards of liquidity doesn’t spoil them; it honours the sacrifices they’ve already made, even if they didn’t choose to make them.
Parents often say they want to “give my kids more than I had.” But imagine the message that sends. A parent who once said, “I’m building this for you,” now hesitates to involve their child, fearing they’ll feel entitled. What changed? Not the child. Only the means to follow through.
That gap between stated purpose and lived behaviour is where confusion, and sometimes resentment, can take root. And here’s the reality: entitlement to wealth isn’t caused by wealth itself. Entitlement to wealth is caused by a lack of context related to the responsibilities of wealth and insufficient preparation to be a wealth manager.
A landmark study featured in Preparing Heirs found that 70% of intergenerational wealth transfers fail, not due to taxes, investment performance, or legal structures, but because of a breakdown in communication and trust within the family.
Preparation doesn’t begin the moment a child inherits money. It starts when they’re old enough to grasp what matters to your family, not just what you value, but why. Expecting them to develop a stewardship mentality overnight is not just unrealistic; it’s unfair.
The implication is clear: if you want the next generation to carry your legacy forward, the solution isn’t to shut them out. It’s to bring them in early, honestly, and with structure.
The Lottery Winner Effect
Research has shown that a significant percentage of lottery winners go broke within a few years. This is not because they lack intelligence but because they lack context and training.
The same applies to sudden heirs. Wealth can become disorienting without a foundation of financial understanding, decision-making, and structure. It leads to mistakes, conflict, and often, quiet shame.
Think of it like muscle memory. Without thousands of hours of practice, no athlete steps onto the field and performs at the highest level. It’s slow, disciplined work. The same goes for wealth. As a business owner, you’ve built that muscle gradually through managing payroll, reinvesting profits, hiring advisors, making hard calls, and learning from mistakes.
If your child pursues a meaningful career that won’t generate the kind of wealth you plan to leave them, how will they build the instincts to manage it? Entitlement doesn’t happen because of wealth. It happens when we give someone the benefits of the outcome without any exposure to the process. They need context. They need practice. They need to see how money works and how it doesn’t. That means pulling back the curtain, letting them sit in on decisions and giving them real stakes, even in small amounts.
Like anything else, good judgment with money is built through repetition. A parent’s job is to help their children build that muscle before carrying the full weight.
When parents say, “I don’t want them to be entitled to wealth,” what they’re often saying, intentionally or not, is “I don’t trust them with it.”
That may be fair when your child is eight years old. But what about when they’re thirty-one? A practicing doctor, raising a family of their own, contributing meaningfully to society, yet still excluded from conversations about the family’s financial future, out of fear they might be or become “entitled.”
That kind of exclusion is not hypothetical. It happens all the time, and it doesn’t protect the legacy; it damages it from the inside out.
Start Small, Stay Intentional
The good news? Stewardship isn’t innate; it’s teachable. And like anything worthwhile, it starts small.
They don’t need decision-making power to begin, but they do need intentional exposure: chances to observe, engage, and build confidence.
Here are a few simple, proven ways to start:
Invite them to sit in on quarterly or annual reviews with your advisors. To listen, ask questions and absorb.
Create a small discretionary fund, a shared philanthropic or impact initiative the family can manage together.
Discuss decision-making openly. When you sell an investment, adjust a trust, or change an advisor, report on why the decision was made.
Define family values together. It may feel abstract, but agreeing on what matters, like education, entrepreneurship, and giving, sets a shared foundation.
This doesn’t require revealing every balance sheet or altering your estate plan. It requires patience, curiosity, and repetition. Over time, these small moments become the training ground for something bigger.
The goal isn’t to test them. It’s to teach them and give them the space to show who they are and who they can become.
Set Expectations Early and Often
Unmet expectations, especially unspoken ones, are a leading cause of conflict in families with wealth. And yet, many go to great lengths to build airtight legal structures, only to leave the most important part of the plan vague: what the next generation should expect.
Your children don’t need to know every detail right away. But they do need early clarity around the big questions:
What will they inherit and what won’t they?
What is being set aside for philanthropy or other goals?
How are decisions made, and who is involved?
What contingency plans exist, and what role do they play?
What’s expected of them, not just as beneficiaries but as future stewards?
Setting expectations doesn’t mean everything must be equal but it does require everything to be explained. It’s not about removing uncertainty entirely, but eliminating confusion.
When expectations are grounded in values, discussed openly, and revisited over time, they become easier to accept even if uncomfortable. Surprises, on the other hand, tend to erode trust and create lasting resentment.
Avoiding these conversations doesn’t protect your family; it undermines it. The strongest families are the ones that talk, not just about what they’re doing but also about why.
For many families, these conversations are best facilitated by a neutral advisor who understands family dynamics and business complexity and can create a safe space for clarity and alignment. It often begins with a shared discussion of values, priorities, and what stewardship should look like across generations.
Avoiding the Wrong Kind of Preparation
Preparing your children to manage wealth doesn’t mean prematurely stepping back or handing over control. This isn’t about early access, it’s about early insight.
Giving a child unfettered control too soon often leads to exactly what families fear: poor decisions, strained relationships, and long-term regret.
Instead, focus on progressive responsibility. That might mean modest investment accounts, joint decision-making on a family donation, or helping manage a real asset with oversight. These aren’t symbolic gestures but low-risk ways to develop fluency, discipline, and perspective.
The goal isn’t faster wealth transfer. It’s deeper readiness.
A Note on Complexity: Families Evolve
As families grow, planning becomes more complex. Spouses, in-laws, stepchildren, and blended family structures can all influence how capital is perceived, distributed, and managed over time.
That’s why wealth planning isn’t just about tax or structure. It’s about shared values, consistent communication, and setting expectations and understandings that account for the people around your children, not just your children. You don’t need to have every answer now. However, acknowledging that complexity and inviting respectful, structured dialogue about it can go a long way in preventing future misalignment.
Deploy Capital When It’s Most Useful
Business owners intuitively know this: you invest capital when it will generate the most return, not too early, not too late, right when it matters most. So ask yourself: when does wealth have the highest utility in your children’s lives?
Is it in their early 30s, when they’re starting families, building careers, buying homes, or facing real financial pressure? Or is it in their 70s, long after the major chapters have already been written?
We’re not offering tax or legal advice. If your goal is to improve your children’s lives, not just their retirements, then timing matters. Capital has the most impact when it supports life’s defining chapters, not just its final ones.
Deploying capital doesn’t mean handing over control. It means using the same judgment and structure you brought to your operating business:
A phased approach
A defined purpose
Clear accountability
That could mean helping with a home, co-investing in a business, or launching a family foundation. The point isn’t the amount. It’s the timing, structure, and message:
“We believe in you, and we’re here to prepare you, not protect you from responsibility.”
If you wait until your children are in their 70s to pass on wealth, you may have improved their retirement, but you missed the chance to improve their lives.
Legacy Is a Choice
Every family has a different story. However, families who preserve wealth across generations tend to share one thing in common: they treat stewardship as a choice, not a hope.
They choose to involve their children early. To communicate openly. To prioritize structure over secrecy, and clarity over control.
You spent years investing in your business: building systems, hiring advisors, reviewing performance, and refining your strategy. Your family wealth deserves the same discipline and the same willingness to start before everything feels “ready.”
Legacy isn’t just about what you leave behind. It’s about who is prepared to carry it forward. Whether your children are eight or thirty-eight, it’s never too early, or too late, to begin the conversation.
At Peninsula Road, we help business owners and their families navigate this transition with intention: through structured planning, facilitated conversations, and a focus on clarity that preserves both wealth and relationships.
Jason Merrithew is the founder of Peninsula Road, a boutique advisory firm that supports business owners and family enterprises during the sale of their companies and the subsequent transition.
Having helped many clients through exits and personally experienced the sale of his family’s business, Jason understands that a liquidity event is both a financial shift and a deeply personal one.
This article reflects his belief that what comes after the sale is just as important as what leads up to it. It’s written for families navigating a significant transition and thinking seriously about preserving wealth, values, and alignment across generations.