Many of us don’t really want to admit that we’re worried about our heirs and the responsibility that will fall on their shoulders when they inherit the wealth we have accumulated. It doesn’t take a big inheritance to create this kind of worry.
That’s why the question, ‘How can I keep from spoiling my children?’ is asked so frequently. If we could answer that question, we would. Instead, Lisa Gray, an award-winning family wealth consultant, proposes that you ask a different question that really can be answered. That question is, ‘Am I talking to my children enough about what wealth really means?’ I think Lisa’s on to something here.
Wealth signifies different things to different people. When you’re thinking about creating an estate or succession plan, it might be really good to understand what wealth means to your children. Here’s why.
A common thread in estate planning is creating trusts. Often, those trusts are used as protection mechanisms because grantors think their children are either a) irresponsible, b) not well-educated about financial and investment matters, or c) that a spouse, brother/sister-in-law, or friend will wield influence over an heir for the purpose of taking advantage of them. Each of these things may or may not be true.
So, here’s where I’m going to propose something that may seem a little radical. What would it be like if our heirs were well-educated in these matters? And what would it be like if we knew what having wealth meant to them? Do they view it as the ability to spend whatever they want, whenever they want? Does it mean they feel so much responsibility that it becomes a burden? Or would they surprise us and tell us that wealth is something they can use to lead a fulfilling and meaningful life and enhance the lives of others.
These kinds of questions are much better than the first question because they open up possibilities that you may not have considered. They also give you ice breakers to have conversations with your heirs. Admittedly, this can be a scary thought! But having someone there to support you in those conversations can mean the difference in your estate plan really benefiting your heirs…or not.
The more knowledge you have about how your heirs really view wealth and how it might affect their lives, the more effective your estate plan will be. If you’d like to explore the possibilities of having these kinds of conversations about your retirement income planning, estate planning intentions, we’d be happy to speak with you. You can reach us via phone at 732-974-3770, or you can email me personally at firstname.lastname@example.org.
Source: Lisa Gray, family wealth consultant and managing member, graymatter Strategies LLC, February 2011 BrainCells Newsletter: “A Simple Change that Can Make All the Difference’
Image courtesy of Grant Cochrane / FreeDigitalPhotos.net
TOPIC: Responsible Wealth