Teach Wealth Transfer as a Multi-Year Education Program with These Tips to Pass Wealth Responsibly
Based on a report by EP Wealth advisor Rich DeRafelo, CFP®, making a successful wealth transfer requires more than just wills and legal paperwork. Instead, he recommends building knowledge, judgment, and confidence in the next generation over time so they can handle the financial world with ease when the inevitable happens.
DeRafelo argues that families should treat stewardship as a multi-year education project to ensure the next generation is more than prepared. Keep reading to learn more about the tips and tricks professionals suggest.
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Tips to Teach Wealth Transfer
Start in Your Current Household
One of the first vulnerabilities to pick out is in the internal household. This may occur when one spouse serves as the household “CFO” while the other is largely uninvolved. This can cause a host of problems down the line, as the surviving spouse will be immediately at a disadvantage if the primary money manager dies or is incapacitated.
Instead, have both spouses be involved with the financials. This may include a single accessible record of accounts and advisers, financial meetings together, or periodically rotating responsibilities to allow both spouses the chance to succeed.
Move Incrementally for Low-Stakes Practice
DeRafelo mentions in his blog that two practical tools are great for families to use to teach money management: annual exclusion gifting and phased trust structures. Annual exclusion is used as a “test run” and is also known as a gift tax exclusion that can range up to $19,000 per recipient for 2025.
These recurring gifts allow the recipients to observe saving and spending habits before larger inheritances come around. Phased trust structures hand control over gradually. Both of these strategies are aimed at giving the recipients more power over time for their financial prowess.
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Phased Trusts and Co-Trustees
Similar to the last tip, phased trusts and co-trustees allow beneficiaries to learn by observation and to incrementally assume responsibility. At the beginning of this strategy, a third-party trustee will manage distributions and investment decisions while the beneficiary watches.
Later, the beneficiary may turn into the co-trustee and share fiduciary duties and learn the mechanics under supervision. However, experts do caution against co-trusteeship tradeoffs. While it can provide checks and continuity, it can also create administrative friction or disputes.
Advisors as Facilitators
Estate documents rarely prepare heirs for properly managing benefits, dealing with taxes, or navigating family dynamics. Industry professionals emphasize the advisor’s role in including the whole family in planning conversations about the future and any assets that will need to be distributed.
By teaching everyone in the family, they will be able to encounter these obstacles with ease. DeRafelo seconds this opinion and frames advisors as educators who can build trust and encourage questions from the whole family.
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Use Informal and Formal Tools
While formal tools such as legal documents are often necessary, don’t forget about using informal tools and notes too. For instance, a letter of instruction could be particularly useful, as it is an informal, nonbinding document that provides practical details (account locations, adviser contacts, funeral preferences, etc.) and communicates the reasoning behind certain decisions.
Always make sure these letters are current and do not contradict legally binding instruments.
Bring Financial Education to Younger Family Members
To make a wealth transfer easy and successful, try out structured financial education programs that teach families about practical money skills. Corporate programs like Schwab’s Moneywise America use a modular curriculum, workshops, and interactive tools to teach young adults and teens how to build financial fundamentals, such as budgeting, saving, credit, and basic investing.
DeRafelo suggests similar low-pressure approaches, like inviting younger relatives to webinars and setting up retirement accounts and emergency savings.
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Checklist for Multigenerational Wealth Transfer
- Confirm both spouses understand key accounts, advisers, and estate documents through a central record
- Use modest annual gifts as supervised “tests” of stewardship
- Consider staged trust provisions with clear language about co-trustee authority and decision-making
- Involve an advisor to facilitate family meetings, align intentions, and teach concrete skills
- Prepare a letter of instruction to convey values and logistical details
- Invest in structured financial education for younger family members
In Conclusion
Cultivating stewardship and successful money management in the next generation is not a single event but a continual process that intertwines legal safeguards with education, practice, and communication.
The end goal is confidence and competence within heirs, so they can properly understand where the wealth comes from, how it’s managed, and any responsibilities within it.
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When families plan for future generations, the wealth transfer stands a better chance of succeeding over time.