Irresponsible Transfer of Wealth can Harm Inheritors - Blair Trippe
The Financial Times wrote a piece on transferring vast amounts of wealth to offspring. If done irresponsibly, it can lead to risky indulgent behaviors from the children. It can also impact their self-esteem, motivation, problem solving skills and social development. Money must be distributed to the next generation with education and in non-abundant amounts.
Read below my comments on the concerns for children who receive money without thoughtful consideration.
“Blair Trippe, managing partner of Continuity Family Business Consulting, which advises wealthy families, says ‘All parents worry about their children, but if you try to solve their problems and help them do their homework and get them jobs from your friends, they won’t develop that passion and drive.’
“Wealth can also inhibit children’s social development. ‘In normal families, you might negotiate using the bathroom,’ says Trippe. ‘In wealthy families, you don’t need to worry about it. They are independent.’ As they grow up and embark on a career, children may have to deal with negotiating with other people for the first time. The problem for some affluent parents, says Trippe, is that their knee-jerk reaction is to spend their way out of problems. ‘If you’re wealthy, money is in abundance and you can freely give it. Time is scarce. It makes a huge difference to empower [a] child, not entitle them. In order to empower them, you have to spend time and make them understand what the role of the gift is.’
“When things go wrong for wealthy children, Trippe says, it may boil down to identity. ‘They are often living off their parents’ largesse. Their identity [is] dependency. To be an inheritor is very challenging for a lot of people.’
“Money can shine a light on differences between generations. Trippe observes that while ‘parents can be immigrants to the world of wealth, their kids are natives. They have arguments because they are from two different cultures. It can be fraught.’ While a parent may think a child is squandering money, the child may be spending in a way that simply reflects different values.”
About Blair Trippe: Blair is a managing partner at Continuity Family Business Consulting specialized in negotiations and conflict resolutions. She co-authored the book “Mom Always Liked You Best — A Guide to Resolving Family Feuds, Inheritance Battles and Eldercare Crises,” aa guide to help families communicate and negotiate effectively. Blair also co-authored “Deconstructing Conflict,” a book about understanding family business, shared wealth, and power. Blair combines her experience in adult family communication and conflict resolution with her business skills to provide clarity, insights, and directional advice to address complex issues that often face family-owned and operated enterprises.
