A common theme for many of my clients is concern around how to prepare children for wealth. Whether your children are adults or toddlers, this causes a great deal of stress. I had the good fortune of attending a workshop that Dr. Dennis Jaffe Ph.D co-facilitated.  A key learning for me was that parents think once all of the very technical aspects of a wealth plan are in place, we feel our job is done.  Dennis explains in this article that the plan is only a beginning.  How we work with our children (young or old) to prepare them to deal with wealth is just as important as any legal document that is designed to help make sure their wealth is protected.  Jaffe provides 7 practical tips on the subject. 

I hope you enjoy the article.

Pat

Secrets of Responsible Parenting – By Dennis T. Jaffe, PhD

Dr. Grubman is a clinical psychologist who works with some of North America’s most affluent families, helping them to negotiate the many unique challenges wealth poses for the family. This article is one I found very interesting. Dr. Grubman et al describe the dynamics within affluent families. The perspectives of a person who grew up around wealth versus the person that is new to wealth are very different. Acknowledging and understanding these differences can be the first step to more effective communication within a family. As Dr. Grubman assures us, wealth and life can be integrated successfully in families and this article is a great starting point for improved communication within the family.

Immigration To The Land of Wealth

James Hughes is a lawyer who has facilitated multi-generational family meetings for the past 30 years. Hughes places special emphasis on mission and governance issues. In his article, Hughes makes a key point about wealth:  financial wealth is not the only type of wealth in a family. Families need to acknowledge the human and intellectual wealth that also exist in order to preserve the real wealth of the family into the fifth generation and beyond.  If you enjoy this article, Hughes  book “Family Wealth Transfer” also provides some excellent tools and tips for affluent families to consider.

James Hughes Article

This is a tool that I have developed to assist my clients as they are preparing their wills. The standard will states that in the event both parents die , after expenses and taxes, the remaining residue estate should be divided equally among the children.  As people become more affluent I believe strongly that this default position should be reviewed.  The question you need to ask is, “ What is an appropriate inheritance to leave my children?”.  When an estate is worth $2,000,000 it may be fine to leave 3 children equal shares. However, if the estate is now worth $20,000,000 is 3 equal shares still appropriate? This worksheet will help you answer that question. Going through this exercise often results in a more well thought out will, and often leads to making charitable bequests a part of the estate plan.

How Much Is Enough (worksheet)