Jonathan Crystal was dangling his legs from a Deer Valley ski lift alongside his teenage son when he realized that an imminent windfall was about to radically shift the futures of his three children.
His family had recently agreed to sell Crystal & Company, a Wall Street insurance brokerage his grandfather founded in 1933. Three generations had grown the risk-management firm to 11 offices nationwide until economics and technology combined in 2018 to create the right moment to sell. Crystal chose the solitude of the lift to tell his son, who replied, “Does that mean you and Uncle Jamie and Uncle Sandy and GPa aren’t going to work together anymore?” Then another repercussion dawned on him. “I guess I’m not going to have a chance to work with you.”
“And it really hit me hard,” Crystal says. The sale would provide a financial bonanza, but it would also take something in return: his dream of teaching his children the family business and eventually passing it down to them, and their dream of having their turn to run it. “It was a mournful moment.” Yet it also planted the seeds for how the Crystals would position their new wealth and their family’s values to encourage the fourth generation to flourish on their own. “It’s not an easy thing to perpetuate success over generations,” he adds.
The Crystals are hardly alone in wrestling with the unintended consequences of a supersize inheritance. Thanks to soaring stock markets and tech fortunes unrivaled in history, family wealth in the U.S. has tripled over the past 35 years, reaching about $140 trillion by 2022, according to The New York Times. That unprecedented tranche of assets has begun to change hands. A potentially world-altering $16 trillion—more than the gross domestic products of Germany, Japan, and India combined—is expected to be passed down to Gen X and millennial heirs within the next eight years alone. Whether that money becomes a blessing or a curse may depend less on the number of zeros than on the method of transfer. In fact, that process may be the most important legacy elder generations leave behind. So, as countless beneficiaries prepare to be flooded by an ocean of inherited greenbacks, the question looms: Will they sink or swim?
Very successful parents are very good at preparing the money for the children. They are not so good at preparing the children for the money.
America’s granddaddy of modern wealth, Warren Buffett, famously said, “The perfect amount to leave your children is enough money so that they would feel they could do anything but not so much that they could do nothing.” His colossal fortune will instead go to charities. His good friend Bill Gates has made a similar pledge, promising that less than 1 percent of his abundant billions will go to his three children. Jeff Bezos, too, has vowed to leave most of his assets to philanthropic endeavors.
Those are their estate plans. But this isn’t an estate-planning story per se. Most people of significant means already have an abundance of financial experts who can set up fail-safe trusts practically in their sleep, run their family offices and donor-advised funds, and minimize taxation. What they’re less flush with: guidance on the best methods for teaching subsequent generations how to wield that net worth in ways that lead to fulfilling and productive lives. Wealth, in the view of an increasing cohort of affluent individuals, is more than money. So, this is a story about imparting true wealth, including the intrinsic values and skills—motivation, hard work, creativity, risk-taking—that built the fortunes in the first place and that allow those who inherit to bloom.
The science—or art—of cultivating beneficial attitudes and habits amid prodigious privilege is nascent. Jessica McGawley, a psychologist and mediator, is one of its practitioners. “Very successful parents are very good at preparing the money for the children. They are not so good at preparing the children for the money,” says McGawley, who consults with affluent families around the world, with most of her clients clustered in the U.K., where she is based, Switzerland, the U.S., India, and Pakistan.
She recommends prepping progeny when they are still young. McGawley founded Dallington Associates 10 years ago to mentor younger generations and intercede with their elders after she witnessed clients struggle with adult children who weren’t flourishing despite their profligate advantages, some falling into substance abuse or other frightening circumstances. Many parents, she felt, were waiting too long to teach their offspring to manage their finances.
Human coin jar illustration
Illustrated by Eiko Ojala
“Nobody was educating teens and 20s,” she says, noting that many parents would begin to involve their children in family offices and wealth management only when the “kids” hit middle age. “I’m reticent to say ‘too far gone,’ but they’re being pulled into meetings with a bunch of scary-looking men in suits, and they have no confidence.”
“When a parent says to me, ‘I have an entitled kid,’ I’m like, ‘Well, who entitled them?’ ” McGawley adds, advising that the least successful way to pass along money and assets is to wait until children reach an age milepost such as 30 and then hand over a substantial income without any scaffolding. “Because they will do nothing until they’re 30,” she says. “We need to start much younger in an age-appropriate way.”
McGawley recommends giving children actual cash—bills and coins—as young as age 5. Many wealthy children, she has found, rarely see paper money or even checks, as most transactions are handled by managers or apps. She also insists it’s vital to learn the price of bread and other everyday items at stores. Young children, she says, should learn to calculate change after a purchase and make their own decisions about saving, spending, or donating money (with the caveat that they save more than they spend).
By 18, she says, they should be involved in the family office, if there is one, and get to know and work with its staff and consultants. “Otherwise,” McGawley cautions, “these advisers become feared beings.” She even advocates giving young adults in their 20s an asset such as a piece of real estate to manage.
It’s a pattern other experts have recognized, too. “Oftentimes in families of wealth, advisers only interact with key decision makers,” says Sharna Goldseker, board chair of her family’s Goldseker Foundation and founder of 21/64, a nonprofit that advises families on how to distribute wealth in a healthy way, guided by tools and data. The organization also forms peer networks to allow families with similar concerns to connect.
Goldseker sees the equation from both sides. She is an heir to a Baltimore real-estate fortune founded by her late great-uncle. “I didn’t earn the wealth,” she says, describing her own emergence as an advocate for putting effort and even data science to work in inheritance matters. She notes that many scions are paralyzed by the successes of their predecessors and need independence and a sense of their own agency to move forward. For her, working at her family’s foundation, and later founding 21/64, provided a means to accept her bequest without shame. “I earned the right to that legacy,” she says.
The 21/64 name refers to the key ages at which people ideally should be prepared to step up to or step back from managing great fortunes. In practice, though, Goldseker often sees the same phenomenon McGawley has observed: elders waiting too long to pass the baton. It’s a dynamic familiar to anyone watching the U.S. Congress or the succession dramas of the Murdochs, the Redstones, or other bickering billionaire clans. People in their 80s and 90s continue to occupy their offices well past the traditional retirement age. “Now everyone says it should be called 21/85 because no one is retiring,” Goldseker jokes.
Her organization trains advisers, offers consulting services, and develops tools to help families prepare the next generations for wealth by openly discussing values and helping offspring define their own futures. Among them: flash cards, sold on the 21/64 website, with prompts designed to spark conversations. One to get you started: “If all your money were gone tomorrow, in what ways might you still feel wealthy?”
Forebears also need to accept a loss of control—and let’s face it, many accomplished individuals are accustomed to calling the shots. Independence may not turn out the way a parent dreams, particularly when a family business is at stake. Nancy Hoffman doesn’t have an obvious successor for her eponymous New York art gallery, though she raised her daughter, Becca, in the art world. “She grew up in the gallery before she learned to walk,” Hoffman says.
Becca, though, had other plans. “She ate, slept, and breathed the gallery,” Becca says of her mother. “It was never my passion. I love art, but I don’t love being in the gallery business.” Still, she did learn one crucial lesson from her mother. Becca recalls her mother challenging her 20 years ago: “You have to learn to work hard.”
“It was the right type of kick in the ass,” says Becca, who went on to carve out her own art career as a curator and now oversees fairs around the world, including the Aspen Art Fair. “She was trying to teach me that you need to find a way to be stimulated.”
In the 1990s, the internet boom created overnight fortunes along with unforeseen challenges for some tech geeks and impresarios who founded wildly successful dot-coms. Many had grown up with modest means but suddenly had to navigate new upper-class lifestyles for themselves and their children simultaneously, with little understanding of what it’s like to be raised rich.
One such founder, who asked to remain anonymous in order to maintain his privacy, describes the experience as akin to being hit by a meteor. “A meteor is something you didn’t expect that you have to deal with,” he explains. Of central importance to him and his wife was preserving the values they’d grown up with, even as their lives transformed from taking road-trip vacations in the family minivan to flying on private jets to their second and third homes.
“How do we grow up with middle-class values and raise our kids that way, but we’re not [any longer] middle class?” he asks, adding that he has seen many peers pay careful attention to the fiduciary details of wealth transfer, from trusts to taxes, but neglect to transfer qualities of character, such as being authentic and grounded, to their children.
For several years the family took sack lunches on fully catered private flights—just as they had in the mini-van. “The enemy to us was entitlement,” he says. Though they built two holiday homes, the family held on to their primary residence, renovating it twice but staying in the same suburban neighborhood with the same neighbors and a relatively low-key lifestyle.
Money tree illustration
Illustrated by Eiko Ojala
They later pulled their children out of some peer networks that exist to connect next-gen heirs because the conversations seemed out of touch with their own family values. “All these rich kids talking about rich kids’ problems,” is how he describes their vibe.
But they did form an advisory committee of wealth managers and trusted friends and consulted with James E. Hughes Jr., considered by many the father of the field of teaching families how to flourish with—or despite—wealth. They created donor-advised funds for their children, noting that the move initially felt “warped” when the kids were young. “They never earned $10,000, let alone gave away $10,000,” the tech mogul says.
With those kids now grown and married, this grandfather feels that the focus on being a mensch, rather than being rich, paid off. Both children are working at rewarding enterprises. “What’s success?” he asks. “We’ve got two kids, each have wonderful partners, each have wonderful relationships with each other and their partners. I view it as success.”
Jonathan Crystal, whose children are only nearing adulthood, likewise sees the conveyance of real wealth as an issue of “value transmission.” His efforts to work on that goal with his own kids led him to sit on the 21/64 board.
“I’ve had the fortune through my work with other families to see the widest range of people giving their children exposure to information, and the concerns they have about demotivation and purpose,” Crystal says. “I’m largely of the view that more information is better. Give your children perspective and insight into not just the what but also the why: how we think about resources, how we think about wealth, how we think about purchasing decisions, how we think about lifestyle decisions.”
“Those are things that I want to have as a conversation with my own children,” Crystal adds of the legacy he hopes he’s leaving. “I would hope that they would have conversations with their children, should they be fortunate enough to have them down the road.”
Zoe Lukov is the daughter of Susan Davis, who had a successful career in communications before retiring and founding the Desert X biennial art exhibition in Palm Springs and Saudi Arabia. She says her mother led by example—and by getting out of the way.
“How do we grow up with middle-class values and raise our kids that way, but we’re not [any longer] middle class?” For several years the family took sack lunches on fully catered private flights.
Lukov remembers the last time she asked her mother to make a call on her behalf. “I was 12, and I wanted to go to camp,” she says. Davis phoned a camp director near their Sag Harbor, N.Y., summer home and snagged her daughter a spot—as a counselor. “You want to be at camp?” Davis asked her. “Go work.” Later, Davis pushed her daughter to reach out for jobs herself, asking, “What’s the worst that can happen?”
Today, Lukov is an independent art curator, grateful for the lesson. “The thing that stays with you is not dollars in your bank account,” she says. “It’s what [your parents] imbue you with. My mother imbued me with a confidence and an ability to move through the world.”