One of the topics that draws much interest is the subject of preparing our children to be responsible custodians of the family wealth.
So, how do we ensure a smooth transition of wealth to the next generation? There are many concerns that parents and grandparents share in the management, understanding, and execution when transferring some or most of the assets and money to their heirs.
Will the heirs be able to handle the transition emotionally? What are the challenges with siblings, grand-children and those adopted into the family? How financially intelligent are the heirs in managing their inheritance and have they been prepared mentally and intellectually for the responsibilities of wealth.
Although there are key principles that parents have to distill/instill within their children that are universal to all families, there are those aspects that are unique to each family and cannot be approached through a ‘mass production program’, but should rather be tailored to the specific needs of each family…
The development of the next generation is key to healthy succession because, as we all know, financial success presents both opportunities and challenges. The key is learning how to use money as an empowering tool for the next generation, so they are able to lead fulfilled, content and harmonious life. If they do that, they run their lives. If they don’t, money runs their lives.
Next generation family members must learn how to be emotionally and mentally prepared for the responsibilities that ownership brings. As future custodians, they must acquire the financial knowledge and information, as well as develop the emotional intelligence to be responsible stewards of their wealth.
Parents report being very concerned about the financial, emotional, and mental well-being of their children in a technologically advanced and fast-paced exposure-ridden environment. Parents report struggling not only with traditional peer-pressure but also the additional pressure of social media’s unattainable standards of beauty, material gain, wealth, and fame as the only measure of success.
For information on wealth psychology and succession, or for a financial therapist and inheritance advice please get in touch here.