The title of this 50-page booklet from The Inheritance Project is also the subject of this blog entry and several more to come. Of all the thorny issues related to inherited wealth—especially when an inheritance comes early in a person’s life—this is the most important and the most challenging. And the most needed. Lately some American and Canadian banks have started programs—usually a few hours’ altogether—for young heirs. I have also seen some articles online and in newspapers. And there are books, some better than others. I find that, with a few exceptions, the advice given tends to be superficial and to suggest that a quick “fix” can address problems that have been years in the making.
“Coming Into Money: Preparing Your Children for an Inheritance” takes a deeper look. Its introduction lists 7 questions to wealthy parents want answers:
* How can I raise my children to become autonomous and responsible adults?
* If I give my children too much money too soon, will they choose not to work?
* What are the other risks of giving money “too soon”? How young is “too soon”?
* How and when should I tell my children that they will receive an inheritance?
* If I postpone giving money to my children for a long time, will they resent me?
* How much should I give to my children? how much is too little? What is too much?
* Should I set up trusts for my children? Or should I give them the money outright?
I will address each of these questions, one at a time, in the coming weeks. Please stay tuned.