Problems for the First-Generation Affluent Family

Rob Weiner remembers his first attempt at sitting down with his two daughters to discuss their inheritance. The oldest was then in college and the youngest in high school. He recalls their total lack of receptivity to the conversation. He believes the issue, at that time, was that the topic was simply not on their radar. Twenty years later, Rob and his wife Vicki are still attempting to do what many wealthy families struggle with: telling their children they are going to inherit a large estate upon their passing.

A majority of individuals polled with a net worth of over $20 million said they were apprehensive about sharing such information with beneficiaries and fewer than ten percent had actually done so. While this may appear odd, the reasoning is sound. Many of these wealthy families do not want to create an impetus for apathy.

Bill LaFond, president of the family wealth division at Wilmington Trust, advises families to make sure that everyone involved is ready to receive this information. He emphasizes that there must be a level of trust between parent and child. Still there are issues, especially with money that has not been passed down through multiple generations. Multi-generational trusts tend to have a system already in place to guide distribution. And while this does not necessarily serve as a stalwart guide, it provides a reference that many single-generation affluent families do not have.

Rob and Vicki, with daughters now married and in their 30s, ask for a family meeting each year. Here, they make an effort to discuss the estate planning consequences of their demise. They divulge what information their daughters request, but calibrate and maneuver the conversation based on their attitudes and receptivity. While this is a difficult conversation for many affluent families to endure, the Weiners attempt to normalize the discussion to make it less of an ethereal topic.

See Paul Sullivan, How the Wealthy Talk to Their Children About Money, N.Y. Times, May 19, 2017.

Special thanks to Matthew Bogin, (Esq., Bogin Law) for bringing this article to my attention.