Many affluent parents worry that their wealth will create children of entitlement. The children of sudden wealth especially can experience a significant change in their living environment at very impressionable ages.
Consider the case of Joe and Mary. They attained their wealth suddenly after selling the family business. Their children, Henry and Karen were 10 and 8 at the time. During the creation and growth phase of their father’s company they lived comfortably but not lavishly at all, a true middleclass existence. Things changed dramatically after Joe sold his company for $50 million. Henry and Karen transferred from a public to a private school, the family moved to a much more expensive home, their parents bought nicer cars and even vacations were more frequent and more exotic. Five years later, Joe and Mary became concerned on how the new lifestyle was affecting their kids.
Enter the importance of family meetings. Conducting family meetings allow affluent families to begin a process that will continue throughout their lives. Typically lead by wealth management firms offering family office services, this process gives the family an intentional time to reflect on their wealth, the legacy of the family, a discussion with each advisor on the wealth team, and perhaps most importantly to create a formal line of communication within the family that conveys what wealth means to them and how they can use that wealth to not only benefit their families but to their community as well.
During their first family meeting, Joe and Mary, Henry and Karen decided that they would give time and financial assistance to the local pet shelter. The kids agreed to volunteer at the shelter once a week for four hours and personally contribute 10% of their allowance to general shelter needs. The family arranged a giving plan to specifically renovate cages and outside shelter areas for a 3-year period.
They decided to continue their family meetings annually and feel like an important hurdle was cleared in the legacy of their family wealth.