Why Preparing Heirs Matters More Than Perfect Planning
By Chad Maggard, Managing Director, Principal in Johnson Family Office

As an estimated $84 trillion moves between generations in the coming decades, many families are focused on taxes, market volatility, and estate structures. Those issues matter. But in my experience, the most overlooked risk is not tax law or investment performance. It is underprepared heirs.

I have seen families devote enormous energy to optimizing trusts, entities, and portfolios, yet spend far less time preparing the people who will one day inherit and steward those assets. When wealth moves faster than maturity, judgment, or purpose, the consequences can reach far beyond finances. It can strain relationships, create confusion, and weaken the legacy a family worked so hard to build.

For family business owners and private business owners, this issue is even more personal. Wealth is often tied to responsibility, influence, and values. A strong technical plan is essential, but it is not enough on its own. Preparing the next generation requires trust, communication, and a clear understanding of why a plan is structured the way it is.

One question I hear often is when heirs should be brought into these conversations. There is no universal answer, but I find that college age or early adulthood is often a natural point to begin discussing estate plans more directly. That is when real financial decisions start showing up: jobs, benefits, housing, debt, and saving. Still, the groundwork should begin much earlier. Financial literacy can be developed over time through habits such as saving with purpose, budgeting for expenses, participating in charitable giving, linking allowances to responsibility, and talking openly about money as a family.

In my experience, wealth transfer plans are more likely to run into trouble because of family dynamics than because of flawed spreadsheets. Even a technically sound plan can falter when beneficiaries are unprepared or when family members serving in fiduciary roles struggle to separate personal relationships from their responsibilities. That is why conversations about expectations, responsibilities, and decision-making are so important. Heirs need to understand not only what they may inherit, but why the plan is structured as it is.

Clear communication helps reduce the emotional and logistical friction that often surfaces during transitions. In some situations, thoughtful governance also matters. Appointing a qualified independent or corporate trustee can bring objectivity, continuity, and discipline that help preserve family harmony and keep decisions aligned with the grantor’s intent.

Preparing an heir also requires more than education alone. I believe in gradual exposure and increasing responsibility over time. One practical tool is annual gifting that functions as practice capital. As heirs reach certain ages or milestones, they can begin interacting directly with advisors or take on shared responsibility in a trustee role. Those experiences often reveal how they think about stewardship, spending, and sustainability.

Families that navigate generational wealth well usually make money a normal topic of conversation. A family mission or values statement can help explain how wealth was created, what it is meant to support, and what responsible use looks like. Without that story, wealth can become just a number instead of a stewardship responsibility.

If I could encourage families to do one thing this year, it would be this: create clarity. Review your plan annually, define your intentions, and begin bringing heirs into the conversation. The goal is not simply to transfer assets. It is to prepare people.

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