Four reasons values are important in maintaining generational wealth

Personal legacy planningFour reasons values are important in maintaining generational wealth

January 18, 2022

Key things to know

  • Values shape who we are and are the driving force behind the decisions we make and the actions we take.

  • Defining your personal values and working together as a family to define your core family values is essential to your family’s long-term financial wellness.

What do we mean when we talk about values? Where do they come from? How do they help foster financial wellness across generations?

Understanding and honoring values, and specifically shared family values, is essential to making significant family decisions around investments, new business ventures, philanthropy and defining your legacy.

Defining and understanding values

Values are key motivators for our behaviors and the driving force behind the decisions we make and the actions we take. Values shape who we are and guide our biases, beliefs and perceptions of others.

Taking time to deliberately clarify and define your values empowers you to bring greater intentionality to your financial decisions. And when families need to make decisions together about shared assets, having shared core values will give your family a greater likelihood of harmonious communications about family money.

When families review comprehensive examples of values (this brief list of values gives a sense of what the breadth of values can look like), they not only get to choose the words that resonate the most for them, but also define what those words mean to them in particular.

Achievement Courage
Social Justice

Adventure Beauty


While certain core values are likely to remain unchanged throughout our lifespan, other values are fluid and may change and adjust over time. Many families will re-evaluate their core values when it’s time to include the next generation and see what may need to be updated or modified.

Inherited and acquired values

What we think of as “core values” are usually acquired and influenced by where we were born (country, city, town, state), when we were born (year/generation), our ethnicity, spiritual and religious affiliations and, most of all, from the influence of our parents, siblings and family members – even our ancestors. Over time, we come into our own and eventually validate that core set of values as our own.

Other values enter our lives as new motivators, often sparked by an incident or life-event. For example, health and fitness may not be one someone’s top values until they have a health crisis. Immediately, health becomes a priority. With a new sense of urgency, this person becomes focused on making changes in their daily habits to become and stay healthy. Another example occurs when the value of “family” surfaces as a priority when a baby is born or when an adult child becomes the primary caregiver to an elderly parent. Additionally, the value of “freedom” can surface due to a divorce or when a young person goes off to college.

Values from our youth can transform as we expand our awareness and experiences. For example, someone who is brought up in a very strict religious household, while still feeling that “faith” is an important part of their lives, may grow to emphasize the value of “tolerance” rather than “religion” to be in greater congruence with themselves as an adult.

Four reasons defining values is important to maintaining financial wellness across generations

1. Values shape who we are and what we become

Values guide our actions, impact our self-esteem and influence how we interact with each other.

Think about how your core values are reflected in your daily thoughts and actions. If you value family, how do you live the value of family? Is it more than just spending time together?

How you demonstrate the value of “family” could encompass how you love and cherish every moment you have with them or what you think and say about, and to, them on a regular basis (including what you say to yourself). Or maybe it’s about the memories you want to create together. It could also be shown in how you honor and respect your family members as individuals as well as part of the larger family unit.

2. Values shape your children’s lives and their opinions of wealth

Any parent knows that children learn family values by what they witness and experience, not just by what’s told to them. You can lecture, preach and instruct all you want, but if your day-to-day actions with money are not aligned with what you’re teaching, your actions will always trump your words.

Consider how unlikely it would be for children to learn delayed gratification if their parents never exercised any impulse control. Or how difficult it would be for children to learn the value of friendship if they perceived that their parents use their wealth to buy and entertain friends. Children may not learn the value of personal freedom and individual strength if, as teenagers and young adults, they’re solely dependent on the family’s wealth.

Conversely, if parents have deep trusting relationships in their life where no money is exchanged, chances are their children will too. If parents demonstrate the power of saving, investing and the joy of being generous with their wealth, chances are their children will have a healthy empowered relationship with money as well.

3. Shared family values often are the glue that holds a family together

When it comes to wealth and wealth continuity, establishing a set of agreed upon family values is one of the keys to achieving long-term success. Shared values provide insight and understanding for making decisions. They also assist family members in reaching consensus on difficult topics.

A family’s shared values are comprised as a subset of the values of the individual family members. Family members do not need to have all the same values across the board, but the family benefits greatly by having some agreed-upon core values. Establishing shared values is instrumental in creating a common purpose and a common perspective; it increases the chance of long-term wealth continuity through enhanced decision-making.

Family “values work” is best conducted when all family members can be present – either in person or virtually. All voices need to be heard, differences shared, and robust conversations encouraged as the family identifies shared values. In these values discussions, families delve into their history to understand what values transcend time, how the same values may look different across generations, and how values may have changed. Families also explore the intersections and overlaps among individually held values and discover those which can be agreed upon by everyone. If someone doesn’t agree with a value being included as a core family value, the family works together to either modify the value so that consensus can be reached, or that value is best removed. At the end of this process, the list of family values must be inclusive.

When families need to make decisions together about shared assets, having shared core values will give your family a greater likelihood of harmonious communications about family money.

Family values can change over time, and from generation to generation there are likely to be significant differences to understand and incorporate. Take the value of entrepreneurship, for example. A family that expects every future family member to be an entrepreneur could easily exclude the budding artists, musicians, doctors and lawyers among them. Other values the family embraces may be more inclusive, such as “work ethic,” “determination,” “achievement,” or “service.”

Similarly, the value of “tradition” can wreak havoc on the value of “freedom.” A family that embraces tradition and getting together the exact same way over 40 years may be excluding family members who hold spontaneity, creativity or innovation as a personal value. Many families have recently discovered the benefit of embracing new ways of convening, especially with today’s use of technology, to connect with distant family members, while still incorporating some favorite traditions in new ways.

4. Shared family values are purposeful

Shared family values serve as core elements in creating vision and mission statements, and they’re a key ingredient in creating family legacy and governance structures. They can be used for building and maintaining asset allocations, serve as guideposts in philanthropic impact planning, and be foundational to estate planning and investment strategies. They can serve as a binding agent for families scattered far and wide.

If personal values answer the question, “What is important to me?,” then family values answer the question, “What is important to our family?” Shared values anchor families in how they’re perceived and how they operate; they help each family member feel valued; and they help families model the way for future generations.

Knowing what each person in your family values and working together to define your core family values (beyond wealth) will help contribute to your family’s long-term harmony.

Learn how Ascent Private Capital Management of U.S. Bank helps multigenerational families manage their wealth today and create a legacy for generations to come.

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Generational family wealth: Bridging the values gap

The best place to start engaging and educating family members of all ages and attitudes toward money is with what matters most: values.


Considerations for family legacy planning

These steps can help you create a legacy plan that both reflects your values and incorporates tax-efficient ways to transfer your assets.

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