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Making The Switch | From Owner to Steward

By Wealth TransitionAugust, 20244 min read

“I don’t need to work; I’m doing this for my kids.”

These words from a patriarch had wider implications than he realised.

 

Comments like these – ranging from “One day this will all be yours” to the patriarch’s statement – are about the purpose of family wealth.

Wealth creators start as ‘Owners’ – the wealth is theirs to do with, as they please.

While the initial intent of wealth creation varies, at some point, the thinking shifts.

From the future – to LEGACY.

 

The question becomes –

What should happen to this once I’m gone?

  • It could all (or most) – go to charity.
  • It could be used for SKI-ing – ‘Spending-Your-Kids’-Inheritance’
  • It could provide for generations to come.

 

But then, other thoughts come to mind…

  • If my kids don’t need to work, what if they end up lazy?
  • I don’t want them to be spoiled, trust-fund-babies.
  • How can I make them tough and resilient (like me)?

 

One way is to retain control over the wealth for as long as possible.

For some wealth creators, that means ruling from the grave.

After all, you know what’s best for them – don’t you?

 

Or do you?

 

Do parents really know what’s best for their children?

What’s the impact of doing what you think is best for them?

These approaches can be more damaging to children than spoiling them!

When parents act like this, their children can end up infantilised and disempowered.

They can end up resenting their parents’ attempts to save them, from themselves.

 

The statement – “This is for my family”, has huge implications!

It means it’s no longer just about you – the ‘Owner’.

It shifts the focal point from you to your family.

And it shifts the wealth creator from ‘Owner’ to ‘Steward’.

 

‘Owners’ own and control (family) wealth.

‘Stewards’ look after family wealth on behalf of something far bigger than them –

something that came before them, and will endure beyond them – their family.

 

Once the focal point is your family, you need to consider their wants and needs.

There is only one way to find out a person’s wants and needs, and that’s to…

ASK THEM!

 

That means, including the children in discussions about family wealth.

(Of course, do it in an age-appropriate way).

These discussions can be wide ranging.

Anything from –

  • How the wealth can be used for the benefit of the family.
  • Projects and initiatives the family can do together.
  • How to raise future generations.

 

These discussions can be really difficult for some wealth creators.

After all, they did all the hard work.

What right do their children have to direct how to use the wealth?

But if the wealth is indeed “for the family”, then the family should have a say.

 

If family wealth discussions are ABOUT them, but do not INCLUDE them, then they are not truly FOR them.

 

This is where having an impartial third-party in the room can be invaluable.

Such a person can facilitate more productive discussions, and be enabling for all family members.

 

Conversation Starters:

  • Who is at the table to discuss family wealth in your family?
  • Who is not at the table? – Why?

 

If you’re an ‘Owner’ thinking about transitioning to ‘Steward’ and would like an external sounding board to help map out your options, my door is always open.

If you’re the rising generation and would like guidance/ support on how your role in the family is evolving, I’m very familiar with the ins and outs of that journey.

Please contact me by reply to talk.

Further reading:

3 Steps to Creating A Healthy Multi-Generational Family Wealth Culture
Introduce your children to your wealth manager
Strained relationships can lead to loss of generational wealth – Family advisor
I Come From a Wealthy Family: Why I Still Had To Take Out Student Loans
Family fortunes: the importance of multi-generational wealth discussions
Why We Don’t Talk About Money (and How We Can)
Family Business: The death of the founder
Hash Out the Inheritance Now, or Fight Your Family Later
The Kids Are Alright—But Are They Right for the Family Business?

Here is more reading on Family wealth advisory.

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