The challenges of bringing up children with wealth are predicated on the idea that said wealth will transition to said children. But what if it won’t?
Some families are thinking more about giving away the bulk or almost all of the family wealth to charity. In the US, families are talking about giving a maximum of $15M to each child (and the rest to charity).
There are different reasons driving this (don’t want to leave children with “too much” or overly entitled, want to make philanthropy the family legacy), and different approaches (e.g. setting up a foundation and having family members involved, so they remain part of the legacy). Of course depending on the numbers involved, giving away “the bulk of” can still leave more than enough for generations to come.
It’s important for families to understand their “why”, and take their children on the journey.
Consider This: If you plan to give significant family wealth to charity, have you considered the reasons? Which family members were involved in the decision? Are you doing it for positive or negative reasons? Will the distribution of the wealth result in a lifestyle downgrade for future generations?
Original articles: http://www.campdenfb.com/article/families-giving-away-their-children-s-inheritance-charity, https://www.bloomberg.com/news/articles/2019-04-22/hong-kong-property-scion-has-no-house-no-inheritance
Actionable Generational Wealth Succession
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