I am reading Kids, Wealth, and Consequences: Ensuring a Responsible Financial Future for the Next Generation by Richard A. Morris and Jayne A. Pearl. This book offers insightful information to help with the many facets surrounding wealth. One of the biggest issues parents struggle with is the discussion about the management and responsibility of wealth with their children. This is evidenced by the secrecy many parents evoke regarding their financial worth. Many believe that children will become spoiled and irresponsible if they have true knowledge of the family’s wealth, or that the discussion of estate plans is too painful because of the implications of death. In addition, many parents believe that having trusts will ensure their wealth lives on for future generations, when in fact even responsible living may be too costly for the sustainability of the trust.
The book offers useful questionnaires that guide parents (and advisors to family business) with their own beliefs about the values of money and how they want their children to behave. These little self surveys help to solidify what parents have trouble communicating, and help guide the parents in future decisions. The book is also filled with little “teachable moments” and “unintended consequence” bites that are easy to grasp and remember. If nothing else, this book arms parents with information so they may have an insightful discussion with their attorneys and financial advisors. It is also helpful to those advisors who may not have a financial or legal background. I highly recommend it.