With most wealth in the country being first-generation wealth, as Wilmington Trust’s Tom Rogerson says, it’s not so much how do you prepare the money for the family but how do you prepare the family for the money.
“They didn’t grow up with a lot of wealth, and the idea of being able to know how to prepare your children for it is a new concept to them entirely,” Rogerson said at a press briefing titled “You Can’t Take it With You” this week in New York.
Some of the top trends Rogerson, senior managing director and family wealth strategist at Wilmington Trust, is seeing in the high-net-worth space are related to this idea of family education, governance, philanthropy and communication.
Warren Buffett once said, “I want to leave enough to my children so they can do anything with their lives but not so much that they do nothing with their lives.”
Rogerson is seeing this become a popular trend.
This summer, he said, “you saw a lot of people talking about Sting saying he’s going to leave very little to his children because he doesn’t want to demotivate them.” And, he added, “We are seeing more of that.”
Beyond philanthropic reasons, Rogerson said there are two reasons people want to leave less to their children.
“Typically they say, ‘I don’t want to damage my children with wealth,’” he said. “They’ve seen children become so entitled that it can be damaging. Equally interesting, they’ve been [saying] ‘I don’t want to take away their motivation. I’m proud of the fact that I built what I have. I’d like them to go do the same thing.’”
Instead of leaving less to their children, families are recognizing the need to build their children’s confidence in being able to handle future wealth, which ultimately builds their parents’ confidence in their children.