\n\tThe Crystals are hardly alone in wrestling with the unintended consequences of a supersize inheritance. Thanks to soaring stock markets and tech fortunes unrivaled in history, family wealth in the U.S. has tripled over the past 35 years, reaching about $140 trillion by 2022, according to The New York Times. That unprecedented tranche of assets has begun to change hands. A potentially world-altering $16 trillion\u2014more than the gross domestic products of Germany, Japan, and India combined\u2014is expected to be passed down to Gen X and millennial heirs within the next eight years alone. Whether that money becomes a blessing or a curse may depend less on the number of zeros than on the method of transfer. In fact, that process may be the most important legacy elder generations leave behind. So, as countless beneficiaries prepare to be flooded by an ocean of inherited greenbacks, the question looms: Will they sink or swim?<\/p>\n
Very successful parents are very good at preparing the money for the children. They are not so good at preparing the children for the money.<\/p>\n
\n\tAmerica\u2019s granddaddy of modern wealth, Warren Buffett, famously said, \u201cThe perfect amount to leave your children is enough money so that they would feel they could do anything but not so much that they could do nothing.\u201d His colossal fortune will instead go to charities. His good friend Bill Gates has made a similar pledge, promising that less than 1 percent of his abundant billions will go to his three children. Jeff Bezos, too, has vowed to leave most of his assets to philanthropic endeavors.<\/p>\n
\n\tThose are their estate plans. But this isn\u2019t an estate-planning story per se. Most people of significant means already have an abundance of financial experts who can set up fail-safe trusts practically in their sleep, run their family offices and donor-advised funds, and minimize taxation. What they\u2019re less flush with: guidance on the best methods for teaching subsequent generations how to wield that net worth in ways that lead to fulfilling and productive lives. Wealth, in the view of an increasing cohort of affluent individuals, is more than money. So, this is a story about imparting true wealth, including the intrinsic values and skills\u2014motivation, hard work, creativity, risk-taking\u2014that built the fortunes in the first place and that allow those who inherit to bloom.<\/p>\n
\n\tThe science\u2014or art\u2014of cultivating beneficial attitudes and habits amid prodigious privilege is nascent. Jessica McGawley, a psychologist and mediator, is one of its practitioners. \u201cVery successful parents are very good at preparing the money for the children. They are not so good at preparing the children for the money,\u201d says McGawley, who consults with affluent families around the world, with most of her clients clustered in the U.K., where she is based, Switzerland, the U.S., India, and Pakistan.<\/p>\n
\n\tShe recommends prepping progeny when they are still young. McGawley founded Dallington Associates<\/a> 10 years ago to mentor younger generations and intercede with their elders after she witnessed clients struggle with adult children who weren\u2019t flourishing despite their profligate advantages, some falling into substance abuse or other frightening circumstances. Many parents, she felt, were waiting too long to teach their offspring to manage their finances.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tHuman coin jar illustration<\/p>\n \t\t\t\t\t\t\t\t\tIllustrated by Eiko Ojala<\/p>\n \n\t\u201cNobody was educating teens and 20s,\u201d she says, noting that many parents would begin to involve their children in family offices and wealth management only when the \u201ckids\u201d hit middle age. \u201cI\u2019m reticent to say \u2018too far gone,\u2019 but they\u2019re being pulled into meetings with a bunch of scary-looking men in suits, and they have no confidence.\u201d<\/p>\n \n\t\u201cWhen a parent says to me, \u2018I have an entitled kid,\u2019 I\u2019m like, \u2018Well, who entitled them?\u2019 \u201d McGawley adds, advising that the least successful way to pass along money and assets is to wait until children reach an age milepost such as 30 and then hand over a substantial income without any scaffolding. \u201cBecause they will do nothing until they\u2019re 30,\u201d she says. \u201cWe need to start much younger in an age-appropriate way.\u201d<\/p>\n \n\tMcGawley recommends giving children actual cash\u2014bills and coins\u2014as young as age 5. Many wealthy children, she has found, rarely see paper money or even checks, as most transactions are handled by managers or apps. She also insists it\u2019s vital to learn the price of bread and other everyday items at stores. Young children, she says, should learn to calculate change after a purchase and make their own decisions about saving, spending, or donating money (with the caveat that they save more than they spend).<\/p>\n \n\tBy 18, she says, they should be involved in the family office, if there is one, and get to know and work with its staff and consultants. \u201cOtherwise,\u201d McGawley cautions, \u201cthese advisers become feared beings.\u201d She even advocates giving young adults in their 20s an asset such as a piece of real estate to manage.\u00a0<\/p>\n \n\tIt\u2019s a pattern other experts have recognized, too. \u201cOftentimes in families of wealth, advisers only interact with key decision makers,\u201d says Sharna Goldseker, board chair of her family\u2019s Goldseker Foundation<\/a> and founder of 21\/64<\/a>, a nonprofit that advises families on how to distribute wealth in a healthy way, guided by tools and data. The organization also forms peer networks to allow families with similar concerns to connect.<\/p>\n \n\tGoldseker sees the equation from both sides. She is an heir to a Baltimore real-estate fortune founded by her late great-uncle. \u201cI didn\u2019t earn the wealth,\u201d she says, describing her own emergence as an advocate for putting effort and even data science to work in inheritance matters. She notes that many scions are paralyzed by the successes of their predecessors and need independence and a sense of their own agency to move forward. For her, working at her family\u2019s foundation, and later founding 21\/64, provided a means to accept her bequest without shame. \u201cI earned the right to that legacy,\u201d she says.<\/p>\n \n\tThe 21\/64 name refers to the key ages at which people ideally should be prepared to step up to or step back from managing great fortunes. In practice, though, Goldseker often sees the same phenomenon McGawley has observed: elders waiting too long to pass the baton. It\u2019s a dynamic familiar to anyone watching the U.S. Congress or the succession dramas of the Murdochs, the Redstones, or other bickering billionaire clans. People in their 80s and 90s continue to occupy their offices well past the traditional retirement age. \u201cNow everyone says it should be called 21\/85 because no one is retiring,\u201d Goldseker jokes.<\/p>\n \n\tHer organization trains advisers, offers consulting services, and develops tools to help families prepare the next generations for wealth by openly discussing values and helping offspring define their own futures. Among them: flash cards, sold on the 21\/64 website, with prompts designed to spark conversations. One to get you started: \u201cIf all your money were gone tomorrow, in what ways might you still feel wealthy?\u201d<\/p>\n \n\tForebears also need to accept a loss of control\u2014and let\u2019s face it, many accomplished individuals are accustomed to calling the shots. Independence may not turn out the way a parent dreams, particularly when a family business is at stake. Nancy Hoffman doesn\u2019t have an obvious successor for her eponymous New York art gallery<\/a>, though she raised her daughter, Becca, in the art world. \u201cShe grew up in the gallery before she learned to walk,\u201d Hoffman says.<\/p>\n \n\tBecca, though, had other plans. \u201cShe ate, slept, and breathed the gallery,\u201d Becca says of her mother. \u201cIt was never my passion. I love art, but I don\u2019t love being in the gallery business.\u201d Still, she did learn one crucial lesson from her mother. Becca recalls her mother challenging her 20 years ago: \u201cYou have to learn to work hard.\u201d<\/p>\n \n\t\u201cIt was the right type of kick in the ass,\u201d says Becca, who went on to carve out her own art career as a curator and now oversees fairs around the world, including the Aspen Art Fair<\/a>. \u201cShe was trying to teach me that you need to find a way to be stimulated.\u201d<\/p>\n \n\tIn the 1990s, the internet boom created overnight fortunes along with unforeseen challenges for some tech geeks and impresarios who founded wildly successful dot-coms. Many had grown up with modest means but suddenly had to navigate new upper-class lifestyles for themselves and their children simultaneously, with little understanding of what it\u2019s like to be raised rich.<\/p>\n \n\tOne such founder, who asked to remain anonymous in order to maintain his privacy, describes the experience as akin to being hit by a meteor. \u201cA meteor is something you didn\u2019t expect that you have to deal with,\u201d he explains. Of central importance to him and his wife was preserving the values they\u2019d grown up with, even as their lives transformed from taking road-trip vacations in the family minivan to flying on private jets to their second and third homes.<\/p>\n \n\t\u201cHow do we grow up with middle-class values and raise our kids that way, but we\u2019re not [any longer] middle class?\u201d he asks, adding that he has seen many peers pay careful attention to the fiduciary details of wealth transfer, from trusts to taxes, but neglect to transfer qualities of character, such as being authentic and grounded, to their children.<\/p>\n \n\tFor several years the family took sack lunches on fully catered private flights\u2014just as they had in the mini-van. \u201cThe enemy to us was entitlement,\u201d he says. Though they built two holiday homes, the family held on to their primary residence, renovating it twice but staying in the same suburban neighborhood with the same neighbors and a relatively low-key lifestyle.<\/p>\n \t\t\t\t\t\t \t\t\t\t\tMoney tree illustration<\/p>\n \t\t\t\t\t\t\t\t\tIllustrated by Eiko Ojala<\/p>\n \n\tThey later pulled their children out of some peer networks that exist to connect next-gen heirs because the conversations seemed out of touch with their own family values. \u201cAll these rich kids talking about rich kids\u2019 problems,\u201d is how he describes their vibe.<\/p>\n![\"Coin](\"https:\/\/robbreport.com\/wp-content\/themes\/pmc-robbreport-2017-v2\/assets\/public\/lazyload-fallback.gif\")
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