When do you tell the next generation that you are wealthy?

Business Leader Post, July 12, 2013

Thomas D. Davidow, Ed.D.

First of all, your kids already know if your family has more wealth/money than others. All they have to do is look around and see the difference in the kind of car or number of cars you own, the size of your house or the number of houses you have, and what your lifestyle is like, including vacations, help and other visible luxuries.  If you don’t discuss your wealth with them, it remains the elephant in the room.

Their comfort in dealing with the knowledge that they come from a wealthy family can vary.

If you live in an urban area where there are other wealthy families, they won’t feel the difference as much as if you live in a smaller community where your wealth is substantially above average and consequently differentiates them from their peers. But either way, your wealth is a reality, and the sooner you talk to them about it the better.

The challenge is what to say and how to say it. The first message is that wealth is a responsibility. The second overriding message is that the family’s wealth is not accidental.

It is a consequence of a set of values and principles. Those messages come together when you discuss the responsibility of the next generation to preserve the family’s legacy for future generations by adhering to the family’s core values.

Of course that is the easy part. Telling them about the core values is different from adhering to them yourself.  And the biggest and most important challenge is to hold the next generation accountable when they behave in a way that is outside of those core values.