What Do Your Children Inherit?

One of the great challenges facing families and society today is the growing gap between generations—the gap in mentality, values, experiences, and the way we see the world.

Every generation grows up in a different reality. And as that distance grows, so does the danger that the connection between generations will be weakened or even lost.

In its more extreme forms, this gap can manifest itself in a rejection of traditional family values or a very different understanding of what is important, shaped by the powerful cultural influences surrounding the younger generation. Those differences can then extend into politics, making what was once simply an age gap a source of real division within families.

But the generational gap doesn't have to look like that. It can exist in much more subtle and easily overlooked ways, even in families where parents are deeply involved and intentional about educating their children to be good people and citizens. There are simply some things that are difficult to transmit when the next generation grows up in a fundamentally different environment. Work ethic, creativity, judgment, business instincts, and the lessons accumulated through decades of experience are difficult to convey to someone who has not lived through the circumstances that shaped them.

This becomes particularly significant when a family has achieved financial success. In fact, one of the greatest threats to family success can be the success itself. The generation that struggled to build something is eventually followed by a generation that inherits it. And the distance between the two can become enormous.

A grandparent may have grown up with very little, worked hard, made difficult decisions, built a business, saved, invested, and eventually created a successful life for his children and grandchildren. Those grandchildren may grow up in a very different world—with freedoms and opportunities their grandparents never had, and with things that were handed to them rather than earned by them.

The money is there. The business is there. The foundation, the investments, the house, or the collection is there. But what about the mindset that created it? What about the values, the decisions, the ethics, the mentors, and the experiences that shaped the person who built it? How do you pass those down?

There is an old saying that wealth goes “from shirtsleeves to shirtsleeves in three generations.” A frequently cited study by the Williams Group, involving more than 3,200 wealthy families, has been reported as finding that 70 percent of family wealth is lost by the second generation and 90 percent by the third.

Those figures have been debated, and they shouldn't be taken as a simple measure of how many grandchildren “squander” their inheritance. But the concern behind the numbers is very real: transferring assets from one generation to another is not the same thing as successfully transferring the knowledge, preparation, communication, and values needed to steward them.

Ronald Reagan expressed a similar idea in a very different context when he said, “Freedom is never more than one generation away from extinction. It has to be fought for and defended by each generation.” He was speaking about freedom. But the principle applies much more broadly. Values don't automatically pass from one generation to another. Neither does wisdom. Neither does the mindset that built a successful business.

This is a real concern for many families with financial means. At some point, the people who actually lived the story will no longer be there to tell it. And with them can disappear the ability to transmit what made their accomplishments possible.

Some families hire advisors to help address this problem. They try to find ways to educate the next generation about stewardship, family values, philanthropy, and responsibility. But there is another way to bridge that gap: preserving the story of the people who came before.

I've had the privilege of working with some prominent families in our community, as well as people from a wide range of backgrounds, personalities, businesses, and life experiences.

Their stories are all very different. But there is something they have shared: a deep desire to transmit what they have learned through their lives—their experiences, their successes, their values, and their life lessons—to the next generation.

They don't want their children and grandchildren simply to inherit what they built. They want them to understand where it came from. And in many ways, a memoir provides a powerful way to do that. It preserves the story, the thinking behind the decisions, and the person. It creates something that can be passed from one generation to another long after the person who lived the story is no longer there to tell it.

Donald Zale understood this.

In the introduction to his memoir about his father, M. B. Zale, and the more than 100-year-old business he built, he writes:

“Before I undertook this mammoth task of tracing my father's story, I said to my wife, Barbara, that our grandchildren should own a book about our family history so their children would understand what M. B. had accomplished.”

He wasn't simply trying to preserve a record of his father's accomplishments. He wanted future generations to understand what had been accomplished—and the person who had accomplished it.

Zale saw the same challenge in his family's foundation. When he decided to step away from chairing the foundation, he knew that things would change. The family had grown, new faces had joined the table, and there were increasingly diverse interests and views. He writes that some family members were proposing things he didn't think M. B. and Edna would have endorsed.

His response was to insist that the family come together to identify the fundamental underlying values of the foundation and make those priorities part of every meeting.

As Donald put it:

“When you're making decisions on how to give away money that you didn't make, it's important to know where that money comes from.”

That's why, he explains, they begin every foundation meeting by talking about what was important to their grandparents.

The story gives meaning to the money. It provides context for the responsibility. And it creates a bridge between the generation that built something and the generations that inherited it.

George Kremer describes something similar in his memoir about his remarkable collection of 17th-century Dutch art, the largest private collection of its kind.

He makes clear that the collection is not simply an accumulation of valuable paintings. It was built by two people who had a clear vision of what they wanted to achieve. Each painting has a story. Each piece contributes to the whole.

And his priority in recounting the story of the collection is to make clear to those who inherit the works that the whole is much more than an accumulation of valuable masterpieces.

The people who inherit the collection can understand what went into creating it. And through that story, they can begin to understand the mindset, values, passion, and vision of the people who built it.

The same is true of a business, a foundation, or a family legacy. You don't just want the next generation to understand what they received. You want them to understand the people behind it—their character, judgment, decisions, values, experiences, influences, and what went into creating the things they eventually left to their descendants.

Because behind every object or asset of lasting value, there is a story.

There is a person who made decisions, things that person believed in, sacrifices and opportunities, failures and successes, mentors and relationships, moments of courage and moments of uncertainty.

And perhaps the story is even more important than the object itself.

Donald Zale expresses this beautifully when he says:

“I hope the messages from this memoir will make an impact on the gap in our experiences, because when you read a book about your roots, you gain a sense of awareness, pride, and connection you never had before.”

That is what a memoir can do. It can reconnect generations whose lives might otherwise feel completely separate. It can allow a grandchild who never experienced the world of his grandfather to understand what shaped him. It can allow someone who inherited a business to understand the decisions and values that built it.

And it can allow future generations to know not simply what they are blessed with, but where it came from and who the person was who created it.

The greatest inheritance may not be the assets themselves. It may be the wisdom and values behind them.

And if those virtues are not preserved, they can disappear with the generation that lived it. Writing a memoir with the right guide is one way to make sure they don't.