Talking to Kids About Money When You’ve Got a Lot
Wealthy parents are often reluctant to talk to their kids about wealth.
If they choose to err on the side of privacy and communicate little, the kids may resent it because they might have made different life decisions had more information been available about future inheritance. The lesson this teaches is that “money talk is taboo.”
If they choose to err on the side of transparency, it may undermine the kids’ motivation to accomplish anything great as they wait anxiously for trust funds to come or inheritances to be realized. I imagine kids groaning: “I always wanted to go to graduate school, but after you told me how much money was in my trust I figured why work so hard?”
Finding an effective middle ground for this conversation is crucial. The great hope is that family wealth will bring security, resources, and opportunities that ancestors never saw. The reality is that wealth can also amplify other family problems and strain relationships.