Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

The term “affluenza” has been used by attorneys and psychologists to describe a condition whereby a young adult lacks the ability to appreciate the consequences of their actions because of financial privilege. A recent high-profile criminal case has attracted a great deal of media attention due to the use of the so-called “affluenza defense.” Though this case illustrates the extreme, it also raises the question of the direct and indirect psychological impact that wealth may have on children. 

Family wealth certainly comes with great advantages, but it also presents challenges. According to a survey of high-net-worth families conducted in January 2013, 84% of respondents said that their most important goal was raising successful, hard-working children.1 A 2012 survey of the same demographic revealed that the top reason parents did not disclose their wealth to their children was over concerns that doing so might negatively affect the children’s work ethic.2

Allowing children to experience the benefits of helping others and making a difference in the world through philanthropy is one way to enhance their empathy for others and help protect them from the pitfalls of entitlement. It is an excellent means of attaching meaning to money and is most often done within the context of family. In a survey done by Nextgendonors, nearly 90% of respondents cited their parents, and nearly two-thirds cited their grandparents as people who influenced their learning about philanthropy.3 Philanthropy often enhances a family’s ability to work together by allowing everyone to engage in shared giving decisions, such as determining where charitable gifts will be directed. This, in turn, can improve children’s leadership skills and financial responsibility in other aspects of their lives. Through philanthropic endeavors, a family legacy of productivity, passion, and purpose can be passed down through the generations.

At Wintrust Wealth Management, we believe in a multigenerational approach to managing wealth and believe it is never too early to begin teaching children financial values. Contact a Wintrust professional to discuss how we can help you prepare your family for the important opportunities and responsibilities that come with inherited wealth. 

 

1. PNC Wealth Management, Wealth and Values Survey: Millionaires and Legacy, January 2013.
2. U.S. Trust, Insights on Wealth and Worth 2012.
3. Nextgendonors.org, Respecting Legacy, Revolutionizing Philanthropy, p.18, 2013.