By, Jim Coutre, Managing Director, Head of Wealth Planning, Pathstone

Raising children to become healthy, responsible adults is as much of an evolving journey as it is a daunting task. And when financial wealth—realized or yet-to-be realized based on the life stage of your family enterprise—is part of the equation, this task can feel even more complicated.

For many business-owning families, early parenting is centered around protection—keeping kids grounded, shielding them from entitlement, and making sure they grow up with a strong sense of values. But as kids transition into adulthood, the role of a parent shifts. Protection needs to give way to empowerment.

The challenge? Many parents don’t realize that their long-held mental models about wealth and parenting may no longer be serving them well. So, how do you adapt to best shepherd children through the transition from teens to adulthood?

This article is about taking stock of reality—seeing who your kids actually are today, reassessing old parenting priorities, and making changes that help your children step confidently into their future.

Rethinking Mental Models Around Wealth

Most parents who live within a family business and financial wealth have deeply ingrained beliefs about money and its influence on their children. These beliefs shape their parenting choices, often without them realizing it.  These “certainties” often include:

• Money ruins kids
• Talking about money makes kids materialistic
• My kids don’t know we’re financially wealthy/will be wealthy
• My kids aren’t interested in our financial wealth

Because of these fears, many parents take a “better safe than sorry” approach:

• They avoid talking about money altogether.
• They downplay their wealth, hoping their kids won’t think about it too much.
• They make financial decisions behind closed doors, assuming that’s the best way to prevent entitlement.

These strategies often come from a place of love and protection, but they eventually age out.

Avoiding conversations about wealth doesn’t teach young adults how to manage it. Shielding them from financial realities doesn’t equip them to make good decisions. If parents don’t take an active role in guiding their children into financial adulthood, who will? Instagram?

If that thought makes you uneasy, then it’s time to rethink the approach.

Taking Stock: Who Is Your Child Today?

One of the hardest things for parents is to recognize when their child has matured. As parents, we spend years focused on raising, teaching, and guiding our young children. Muscle memory keeps us focused on this approach as the years pass. As our kids reach the later teens and early twenties, the reality is:

• Their sense of self is taking shape.
• Their values are solidifying.
• Their frontal cortex (the part of the brain responsible for impulse control and decision-making) is maturing.
• They are becoming capable of making thoughtful financial decisions—if given the right tools and trust.

If parents don’t take a step back to acknowledge this growth, they risk parenting based on outdated fears instead of present realities.

Example: The Motivated Son

Parents we work with were hesitant to talk about a pending liquidity event with their 22-year-old son. They feared that knowing about a significant inheritance would demotivate him.

When asked what their son was like, they immediately started talking about a physically and mentally demanding training program he had enrolled himself in. Mid-story they paused and chuckled, “Yup, I guess that fear about him lacking motivation isn’t really an issue.”

Example: The Entrepreneurial Daughter

Another couple had set up a trust to “protect” their daughter from early access to family wealth. The reasoning? They feared she might make impulsive, emotional decisions that might take away funds she’d need later in life— a totally rational decision when she was a young child and maybe even as she meandered through high school without focus.

Fast forward to her mid-twenties—she had “found her thing” and was collaborating with a former professor to bring a video game she created to market. Do you know what would be more helpful to her than money locked up in a trust until she turned 40?  Exactly. Some seed funding to pursue her entrepreneurial spirit.

The Big Question for Parents

Are the financial rules, structures, and narratives you created when your children were younger still serving them well—or are they holding them back? (And might they be holding you back from the relationships you want to have with them as they grow into adulthood.)

Making the Shift: From Protection to Empowerment

Once you recognize that your child is now an emerging adult, the next step is adjusting your approach. That means moving away from secrecy and control and toward guidance and partnership. One of the biggest tools for this transition? Transparency.

The Power of Financial Transparency

Many parents struggle with the idea of being open about wealth. For years, the model was to “protect” kids from knowing too much, either out of fear of entitlement or a desire to preserve childhood innocence.

But as children enter adulthood, transparency becomes essential.

Transparency isn’t about handing over every financial detail overnight. It’s about progressively involving them in financial conversations, so they can develop a sense of ownership and responsibility over their money, the family’s wealth, and ultimately the family enterprise.

Why Transparency Matters

• It builds trust. Being open about wealth signals that you see them as capable adults – a key step if you hope to eventually involve them in the business.
• It prevents misinformation. Without real numbers, young adults may assume the family’s wealth is either far greater or far smaller than it actually is.
• It allows them to plan for the future based on their reality. How many promising potential teachers chose careers that don’t resonate with them because of pay? We all know drive, hard work, postive impact, self-worth, and pride can be embedded in one’s career regardless of the size of the paycheck.  
• It teaches real-world financial skills. Money management isn’t just about numbers—it’s about values, discipline, and decision-making, which require both technical and emotional skills.

How to Start the Conversation

If you haven’t been open about wealth before, don’t panic. It’s never too late to start.

Here are some practical ways to ease into financial transparency:

1. Normalize money conversations
   • Talk about financial decisions openly, like planning a family vacation—how costs are determined, why certain choices are made.
   • Discuss values around spending, saving, and investing.
   • Don’t lecture. Raise questions. Seek understanding.
2. Give them real financial responsibilities
   • Instead of just handing them a credit card and getting mad at their spending, give them a budget to manage. Ask them to demonstrate their ability to save or to defer gratification.
   • Consider giving them an investment account to oversee and help them be successful in its management.
3. Clarify expectations
   • Be upfront about what financial support they can (or cannot) expect and when.
   • Discuss the purpose of family wealth—its role in their lives and the broader family legacy. Share the values you have found rewarding in your life.
4. Encourage financial education
   • Help them understand taxes, investments, and financial planning.
   • Let them sit in on operating company meetings, or family investment meetings or foundation discussions.
5. Share the family’s financial history
   • Talk about how wealth was created and managed (over generations if the case).
   • Discuss mistakes and lessons learned. Money management isn’t just about success, but also resilience. Make sure they aren’t paralyzed by the risk of failure and that failures can be learning and growth opportunities.

Final Thoughts: Evolving as a Parent

Parenting doesn’t end when kids leave the house. It evolves.

The transition from childhood to adulthood is a critical time for financial sense-making. This is when young adults bake-in their beliefs about wealth, responsibility, and independence.

If parents continue to shield them from financial realities, they lose the chance to shape that understanding in a meaningful way. They’ll also be sending off kids who are ill-equipped to stand on their own two feet (however the family defines that) or confidently enter the family enterprise.

So, take stock of reality. Look at your children as they are today, not as they were five or ten years ago. Adjust your parenting approach, embrace transparency, and give them the tools to build a financially responsible and fulfilling future.

Because in the end, the goal isn’t just to raise kids who can handle financial wealth. The goal is to raise adults who can thrive both financially and personally.

If you have any questions about this article, please contact us at [email protected]

Policy and Taxation Group is the Voice for Family Offices and Successful Individuals in Washington, DC focused exclusively on the critical tax and economic policies that impact them.

Since 1995, Policy and Taxation Group has been the leading advocacy group working to reduce and eliminate estate tax, gift tax, and generation skipping transfer tax while blocking increased income tax and capital gains taxes, the creation of a wealth tax, and other hostile tax policies that punish hardworking taxpayers and success.

#incometax #taxseason #federaltaxpolicy #taxation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #CapitalGainsTax #incometaxrates #incometaxseason #taxrefund #taxreturn #incometaxreturn #gifttax #Generationskippingtax #InheritanceTax #repealestatetax #FamilyBusiness #promotefamilybusinesses #familyowned #supportlocalbusiness #womeninbusiness #AdvocatingForFamilyBusinesses #Generationallyowned #Multigenerationalbusiness  @FamilyEnterpriseUSA @PolicyAndTaxationGroup @DitchTheEstateTax #FamilyEnterpriseUSA #PolicyAndTaxationGroup #DitchTheEstateTax