Having created or inherited significant wealth, be it tens of millions or tens of billions, parents inevitably face the issue of discussing and preparing their children or grandchildren for the responsibilities it entails.
Many family members approach this process with great reluctance or even outright dread. However, others view it as an opportunity to instill in the next generation a framework for understanding family wealth, values, and “responsible prosperity,” i.e., the recognition that with great wealth comes both meaningful family and societal expectations.
It is all about ensuring the next generation will live purposeful, healthy and productive lives, becoming responsible stewards of both family wealth and legacy. Simply hoping and trusting that the next generation will successfully navigate the social and psychological forces that will inform their beliefs and actions with respect to family wealth, is leaving far too much to chance.
We believe a comprehensive framework for engaging children around matters related to family wealth, regardless of age or maturity is based upon two foundational precepts:
- Family values: Values are the “glue” that binds our behavior and beliefs. The way family values are expressed, communicated and embraced are the foundation upon which wealth inheritors prepare for proper stewardship of wealth.
- Life experiences: Exposing young adults to a diversity of experiences, people and education informs opinions, shapes self-awareness, and fosters good judgment. This includes behavior modeled by parents and other influencers that reinforces positive and constructive patterns of behavior.
Admittedly, there are no universal approaches that fit every family. Families are challenged to craft personalized strategies that reflect their unique values, needs and characteristics. Young people, who are grounded in strong values, are self-aware, worldly, challenged and ready to assume leadership roles, possess the ability to create, grow, and transform the family enterprise.
Some will do this on a global stage, others in their communities. Regardless of the nature or scale of their impact, much is to be gained by families who address head-on how they prepare young people for the benefits and obligations of wealth.
There are few substitutes for effective and candid communication when addressing the role of family wealth and its impact on all concerned. Families should avail themselves of trusted advisors when there are meaningful barriers to good communication between couples or with children.
That’s because introducing and preparing young people for the responsibilities and burdens of wealth is a continuing process that begins at a young age and continues well into adulthood.
For a more detailed perspective on preparing children and young people for the responsibilities of wealth, read our latest white paper on the subject.