Perhaps a Catch
22 ? “Wealthy parents aren’t raising kids to be good with wealth, so they
refuse to leave them wealth.” This is a quote from an article I just read “Millionaire
Parents Say Their Kids Are Unfit to Inherit” http://www.cnbc.com/id/47859258/Millionaire_Parents_Say_Their_Kids_Are_Unfit_to_Inherit
Transitioning
wealth is no different than transitioning leadership in a company. If you
handed a company over to a CEO with little to no experience the company would
surely fail. Handling a million or billion dollars is a big responsibility; the
parents should ask themselves what is the goal of the inheritance? Preserve
wealth or increase wealth? Depending on the goal it may require a different
strategy.
Similarly to
transitioning leadership in a company the parents will need to take an active
role with their children, it will require a time commitment, patience and
developing a common vision for how the money will be managed. Together the
parent & child need to build a strategy that aligns to a common vision of
how the inheritance will be used & determine if the child is capable of realizing
that vision.
The real losers
in this are the children, it may be true that they are unfit to handle the
inheritance or do not share the vision with their wealthy parents. Regardless
of whether you pass down billions, millions or one dollar, there is a serious
alignment issue between the values of the children & the parent.
Parent & child
should sit down & develop a strategic plan & transition strategy, the
planning should start at an early age & may take years of planning and
transition to get it right!
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