If you plan to give your children anything for free, give them an understanding of stewardship. It’s the opposite of the silver spoon syndrome, the opposite of having a “sense of entitlement” and it is the best way to ensure your kids are empowered by your wealth and not disabled by it.
The issue that many of our clients face is that they are the pioneers, they are the leaders and their children are the followers. They are what author Jim Grubman calls “immigrants to the land of wealth,” whereas their children are “citizens.” Because of this, it can be difficult to instill in them the same sense of care and responsibility in dealing with your family’s wealth because they weren’t the ones that created it. It’s important for parents to know, understand and accept this.
Fortunately though, there is still a lot that can be done. Stewardship needs to be taught by example because kids are often self-oriented when they are young. It’s a process that takes time. It is long term, cumulative and it compounds—just like your wealth.
Here are some suggestions for you and your family:
- Use philanthropy as a teaching exercise. Get your children involved in your cause and work through it together, every step of the way.
- Consider a “family bank” concept. Work together as a family to help your kids understand that it is the “family’s capital” and not something for them to exhaust and waste.
- Family meetings can be a great way to help create an environment of transparency and stewardship. Helping them feel like they are truly “part of the family” and part of managing the family’s wealth can go a long way.
- Another great option to consider is allowing your kids to become the Trustee of their own Trust. It helps them to understand that the family’s wealth is for the benefit of the beneficiaries, which could ultimately be their own kids or grandkids.
With wealth comes responsibility, especially if you want it to mean something to your children. A commitment to ensuring your wealth doesn’t negatively impact your kids, and taking the steps to educate them, will go a long way in helping them develop a sense of responsibility and not end up choking on a silver spoon.