For many affluent families, preparing children for the future involves more than teaching financial literacy. Estate plans, trusts and investment education are important, but they address only part of what it takes to preserve wealth across generations.

In Building Character: Raising Children Under Five in the Midst of Affluence, Valerie Galinskaya and Phoebe Massey of the Merrill Center for Family Wealth® explore a foundational question: How do parents raise children who can thrive in the presence of wealth rather than be defined by it? Their research suggests the answer begins far earlier than many families realize.

Drawing on child development theory, family wealth psychology and experience working with hundreds of families, the paper explains that children who successfully integrate wealth often possess strong character before they acquire financial skills. Responsibility, gratitude, resilience, honesty and self-awareness can provide the foundation for future wealth stewardship.

Why character matters in wealthy families

Affluence creates opportunities that can enrich a child's life, but it can also introduce complexity. Wealth may amplify family dynamics, create questions about privilege and responsibility, and make it tempting for parents to remove obstacles that could help children develop independence and resilience.

While financial competence can be taught later in life, character may be more difficult to shift after patterns are established. That makes the earliest years an important period for families seeking to build a lasting legacy.

Family culture is the foundation

The Center describes family culture as the invisible 'software' that drives family interaction. It shapes how children learn to communicate, handle conflict, interact with others and understand the role of wealth in their lives.

Building a strong family culture starts with intentional conversations. Parents can discuss their beliefs about money, define what success looks like for their family and agree on the values they hope to pass to their children. Consistent messages give children a framework for making decisions as they grow.

There is also the importance of connections beyond the family. Relationships with friends, community organizations and charitable causes can help children develop compassion, perspective and a healthy understanding of the broader world.

Small daily habits can shape future outcomes

Character is rarely built through a single conversation. It develops through repeated daily experiences. Teaching children to say 'please,' 'thank you' and 'I'm sorry' can reinforce respect, gratitude and accountability. Encouraging children to contribute to family life through age-appropriate responsibilities can also demonstrate that belonging comes with both privileges and obligations.

The 'Golden Sippy-Cup Rule' offers a practical example: A child who can walk and hold a cup can be expected to carry it to the sink, or another designated place, when finished. The task is simple, but the message is meaningful. Even young children can contribute and take responsibility.

Parents must also model the behaviors they hope to see. Children closely observe how adults treat others, handle frustration and respond to mistakes. Consistency between words and actions strengthens the lessons parents want to instill.

Resilience and the value of challenge

Parents with significant resources often have the ability to solve problems quickly. However, repeatedly rescuing children from frustration can limit opportunities for growth. Resilience develops when children are allowed to struggle, adapt and recover with appropriate support.

Learning to navigate setbacks, delay gratification and persist through discomfort can be as important as learning to manage money. These qualities may later support effective wealth stewardship, leadership and decision-making.

The power of family stories

Family history can help children develop identity and resilience. Research suggests that children who know their family's story may develop a stronger sense of control, higher self-esteem and a more positive view of how their family functions.

Stories that include both successes and setbacks can help children understand that achievement rarely comes without adversity. For families of wealth, sharing the journey behind the family's success may help younger generations appreciate not only what was built, but also the values and sacrifices that made it possible.

Preparing the next generation starts earlier than you think

Building Character offers a practical framework for families interested in multigenerational wealth planning, family legacy and raising responsible heirs. Rather than focusing exclusively on financial literacy, we encourage parents to invest in the character traits that support lifelong success.

The message is simple but powerful: A strong family culture, intentional parenting and consistent daily habits can help children develop the wisdom, resilience and responsibility needed to thrive in the presence of wealth and beyond.

If you'd like help preparing the next generation to navigate the opportunities and complexities of wealth, contact your Merrill Private Wealth Advisor, who can leverage resources and insights from the Merrill Center for Family Wealth®.