A kayak instructor was instilling the confidence in a group of tenderfoot guests to roll their glistening kayaks in a huge mountain lodge swimming pool. Many were immersed well beyond their comfort zone during what to some seemed like minutes. But the instructor knew they needed to be ready for a testing kayak excursion that would take them well beyond the safety of the northern resort. When they came out of their roll, spluttering but triumphant and relieved, the instructor knew he had earned their trust by helping them to confront something unknown and disconcerting.

“Unknown and disconcerting” often characterizes the process by which a family business owner passes his or her business and/or wealth to the next generation. Indeed, few topics can spark both joy and stress faster than thinking about how to share one’s abundance with the kids.

Successful conversations about money between parents and their adult or younger children come with careful listening and thoughtful discussion. These conversations are not an event, but like family business succession planning, are part of a process that takes patience, collaboration and mutual respect. Unfortunately, this process can lead many parents out of their comfort zone.

Here are six tips on how parents can make wealth transfer successful and meaningful for all family members.

1. Get rid of outdated codes of conduct.

Many parents wrestle with their tendency to remove risk and initiative from their children’s and grandchildren’s path. They do this by dictating an outdated code of conduct in business and life that in some cases remains unbroken three or even four generations later. When a child has had a middle-class or affluent upbringing and has been well taken care of, some parents want to save them from possible harm. They become risk managers as much as parents. The parents don’t empower the children to break the mold created by their parents or ancestors and in the worst situations, the children never develop a sense of self or the rewards that risk can bring. They remain forever emotionally attached to the provider. They are therefore often are deprived of the spirit of adventure and self-confidence that helped their parents or grandparents succeed in life and business. It is no surprise that 70% of Canadian family businesses don’t make it to the second generation. And of those that do, 70% will not make it to the third generation. If the prevailing model of wealth preservation and succession planning fully empowered the next generation, that number would be dramatically lower.

“From shirtsleeves to shirtsleeves in three generations”

A popular description of family-owned business in Mexico that fail is, “Father, founder of the company, son rich, and grandson poor” (Padre noble, hijo rico, nieto pobre). The founder works and builds a business, the son takes it over but is poorly prepared to manage and make it grow. He nevertheless enjoys the wealth, and the grandson inherits a dead business and depleted bank account. The phrase, “From shirtsleeves to shirtsleeves in three generations” also describes this common phenomenon.

2. Look beyond the numbers

Rather than focus exclusively on the nuts and bolts of a family business or investment portfolio (such as tax efficiency and capital preservation issues) parents should take the time to fully understand the family dynamics that ultimately affect both. If the family can’t find common ground or amicably agree to part ways, no amount of number crunching or tax savings will help the parents or their children gain peace of mind.

It’s ironic that the strengths that helped many patriarchs and matriarchs build something great – single-mindedness, tenacity, and in many cases sheer stubbornness – often turn against them to weaken or destroy all they have worked to build.

Protecting the financial aspect of the legacy has traditionally come first among matriarchs and patriarchs, followed by the emotional well-being and growth of the beneficiaries. Parents must reverse that sequence. Families should work to become fully functional and resolve their differences before the potential stresses of inheritance and estate succession planning may rear up. This can help avoid family rifts that can quickly undo the intended benefits that inheritance can bring.

3. Let them meet the people

At an early age, parents can expose their children to people from all walks of life and let them figure out how to work with many personality types. They should encourage them to embrace their own diversity (including sexual orientation and inter-cultural partnerships) and respect others with different values in the global community.

4. Get over their own control stuff

Parents with wealth would do well to come to terms with the value of their human, not just financial capital. They will then be better able to fulfill the social and community responsibilities that accompany wealth. They will also leave happier legacies when they enhance the quality of their lives through volunteerism and philanthropy.

The fear that grips many ruling factions around the world is the same fear that some Canadian patriarchs have passed down through the generations. Rather than equip their heirs with the vision to try something different and to adapt to new social forces, they stick to what they were taught – ultimate control in order to protect their abundance. Then, they must contend with the two biggest challenges to leaving a legacy of abundance and joy. One: identifying the fairest and most effective terms under which to pass the money down and two: ensuring a plan is in place well before they die or if they are business owners, long before they retire.

Getting the estate or family business succession plan in order is a great place to break the cycle of control that may go back generations.

5. Parents need to choose advisors carefully

Parents often assume that their advisors who have been with them for decades will naturally make the best decisions about structuring the transfer of the parents’ wealth to their children. They need to ask some tough but vital questions. Does the advisor know the children and understand their life goals? Are they willing to take the time to learn those goals? This person may be an accountant or financial advisor whose training and expertise is based on developing tax or investment strategies versus advising families on a range of personal relationship issues. Families may not appreciate the fact that although they hold the person in the highest esteem, he or she may not be equipped to provide the advice they need. The affluent have traditionally relied on their financial advisor, lawyer, or accountant for advice on practically anything. Many still see them as their “go to” person.

Many families don’t realize they could also be well-served by professionals who specialize in guiding them to the resolution of the often complex interpersonal challenges the family faces. Seeking guidance on deeply rooted family issues from your trust officer can be like going to your dentist for treatment for a back problem. Rather than offering solutions as tax and other technical advisors might, the best family coaches can bring holistic approaches to bear that bring all family members to the table.

The estimated value of Canadian inheritances over the next 15 to 20 years is one trillion dollars. And the estimated total value of Canadian inheritances for the 10 years ending in 2010 was $550 billion alone. Decima Research notes that the average inheritance in Canada is $56,000 and that this amount will swell to approximately $300,000 in real estate and other assets including cash. This represents a potential financial bonanza for a growing number of advisors with varying degrees of ability and experience.

6. Don’t let your children get complacent

It’s clear that children of wealth can face many daunting challenges. For example, there is the fear of being disinherited or “cut out”, which many children of family business owners may face. They fear a misstep that would displease the matriarch or patriarch and therefore stick to the old ways that can lead to frustration and stress, let alone financial loss. Facing a wildly competitive global arena, they then become almost paralyzed at the thought of changing to compete. Or, they may sell the business at a discount, make big bets on markets and products they don’t understand and vaporize the business the generation before them so carefully created.

Perhaps worst of all is the sense of entitlement (versus empowerment) many feel. They are told the family’s investment portfolio or business is “too big to fail” and that if they behave, they will never have to worry, or at least never have to work a day past their 50th birthday. Parents should avoid espousing the wisdom of Alfred E. Neuman (above), the iconic face of Mad magazine who asked, “What, me worry?”

Parents’ equal emphasis on wealth preservation and their children’s emotional development can help break the cycle of fear, false expectations and loss of personal identity and self-esteem.