I settled down this morning with U.S. Trust's 2012 Insights on Wealth and Worth as a little light beach reading (sigh... if only. I'm still at the office). Some of the findings knocked me out of my chair. Among them:
- Six in 10 HNW parents are not fully confident their children will be well-prepared to handle a financial inheritance.
- The younger generation is more likely to have full confidence in their children's preparedness.
- Nearly four in 10 parents strongly agree their children would benefit from discussions with a financial professional.
- Just over one-third of wealthy parents have fully disclosed their wealth to children, while half report having disclosed just a little regarding their financial status.
- Nearly half (48 percent) of people over age 67 said, "I was taught never to discuss wealth."
Responsibly handling money (whether it's a thousand dollars or a hundred million) has a good deal to do with information, but even more to do with intangibles like maturity, the ability to moderate impulses, and the formulation of meaningful goals. To successfully pass wealth from one generation to the next the tasks of money management must be imbued with positive associations, but these bullet points indicate strife, discord, and intergenerational blame.
I know that it's not a popular past-time to bemoan how hard it is to cultivate new generations of rich people, but it always makes me sad to see money as a source of emotional constipation in families. In all of the wealthy families that I know and have worked with, money is the dark matter that exerts a gravitational pull on all involved. The healthiest way to deal with this is to bring it out of the darkness and acknowledge it's influence on relationships and behavior. Money can do great good in the world and can be a source of positive family identity. But unhealthy families create unhealthy financial behavior again and again and again.