I believe every family is an enterprise designed to manage its goals, values, sustainability, wealth and legacy across generations. Families who treat wealth as a family business increase their chances of defying the statistic that wealth rarely lasts beyond three generations.
To guide multi-generational wealth among families as a financial planner, I earned a certificate from Cornell University’s Family Business Leadership program. Having attended business school as an undergraduate and graduate student, I was well-versed in a curriculum centered on “hard skills.” I expected the Cornell program to follow a similar approach by focusing on family governance—the legal, financial and operational aspects of running a family office.
To my surprise, the program highlighted stewardship, values and family relationships as the foundation of a thriving family enterprise. Emotional intelligence bridges the gap between technical expertise and the human dynamics influencing financial legacies.
Emotional Barriers to Managing and Transferring Wealth
According to the American Psychological Association, emotional intelligence is defined as “a type of intelligence that involves the ability to process emotional information and use it in reasoning and other cognitive activities, proposed by U.S. psychologists Peter Salovey (1958–) and John D. Mayer (1953–).” Effective family leadership requires the ability to navigate emotional dynamics across generations, providing a crucial balance to the execution of financial strategies and governance structures. When left unaddressed, emotional barriers can significantly hinder the successful management and transfer of wealth.
“A parent’s fear of raising entitled children if they share details with the next generation is a common emotional barrier that families face when managing or transferring wealth,” said Kingsbury, author of Breaking Money Silence®: How to Shatter Money Taboos, Talk More Openly about Finances, and Live a Richer Life. “This fear leads parents to believe it’s not their children’s business to know about their wealth.”
While fear of entitlement can lead parents to withhold financial information, heirs often grapple with their own emotional burdens.
“Whether it’s grief from the loss of a loved one passing on the inheritance, guilt for inheriting money they didn’t earn, or the insecurity about managing the responsibility of wealth, navigating the emotions tied to sudden wealth brings additional complexity to family financial dynamics,” said Ruschelle Khanna, a therapist and advisor to high-net-worth enterprising families and author of Inherited Trauma and Family Wealth: A Guide to Heal Your Relationships and Build a Lasting Legacy.
Risks of Unattended Emotions
What is a clear sign that emotional intelligence is missing in family wealth?
Khanna responded, “There is no plan for succession, even if it has been frequently discussed.”
Khanna believes unresolved financial-related trauma often represents the primary unconscious force driving financial decision-making or lack thereof. “It is the most underestimated influence,” said Khanna.
Stressors and conflicts related to money beliefs, habits and decisions can disrupt a family’s ability to design and implement a meaningful succession plan and execute a successful wealth transfer through estate planning.
“I have worked with many individuals who have tried to talk about wealth in their family, yet other members resist doing so,” said Kingsbury. “It’s important that family members are open to learning about each other’s perspectives, working toward mutual understanding without trying to prove who is right and who is wrong.”
Deloitte’s case study, “On the brink of the third-generation curse: Important lessons from a first-generation family office executive,” in its The Fireside: A Family Office Case Study Collection, 2025, weaves together family as the biggest risk to wealth transfers due to generation fear, distrust, miscommunication and trauma as identified by Khanna and Kingsbury.
Preserving Wealth and Strong Relationships Across Generations
How can families preserve wealth while maintaining strong relationships across generations?
“Financial therapy can be a useful tool for learning more about how wealth impacts families, improving communication around finances, and breaking the cycle of money silence,” said Kingsbury. She invites her clients to explore the underlying conflicts, money histories, and personal narratives shaping their financial beliefs. Kingsbury also believes financial advisors play an important role in facilitating money conversations about family values and teaching families how to manage money responsibly.
Khanna incorporates mediation in her family therapy and advising sessions. She helps families uncover, recognize and address destructive generational patterns, including parenting-related ones. Khanna encourages financial advisors who desire to introduce emotional intelligence into their work with clients to develop skills such as motivational interviewing and become trauma-informed.
For financial advisors seeking a better understanding of psychology and therapy in wealth management, the Financial Therapy Association brings together multi-disciplined professionals committed to improving relationships with money for an individual’s and family’s well-being through evidence-based practices and resources. The CFP Board incorporates the Psychology of Financial Planning as one of its eight principal topics covering behavioral finance, money conflicts, counseling principles and crisis management. Several well-known and published experts continue to advance this work in financial services through books, certifications and training.
By integrating technical and emotional expertise, families position themselves for a sustainable legacy anchored in financial strength and shared family values and practices.