Are your children properly mentored
to carry your family's legacy?
Often we are torn about how to mentor our children
on financial values or educate them on the value of money.
Warren Buffet taught his kids a valuable lesson
about philanthropy when he gave more than $40 billion to the Bill
& Melinda Gates Foundation and left $8 billion for his kids.
His family is still set for many generations to come and the important
charities begin to benefit now.
Donald Trump's children were seen on "The Apprentice"
show saying their dad gave them each a very small (by all standards)
allowance while they were in college.
So, how can we focus our children's education on
preserving generational wealth? It is part of our jobs as wealth
managers to help you develop not just an investment portfolio,
but your family's financial vision. This vision will act as a
road map to continue the legacy you have built. Frequently, wealth
creators (individuals who have created their wealth themselves)
are perplexed about where and how to start their heirs' financial
education. Affluent parents feel it is an important objective
to teach their children to manage money wisely and continue the
family legacy of giving back to society.
They worry about the right way to teach their children
about their roles and responsibilities of managing wealth in their
lives. It is important for us to understand that wealth management
is a family issue, because children learn very early on if they
are more affluent than their peers.
A wealth managers' role is to develop a focused
strategy that drives your future financial-related decision making,
early on. This can simplify your life by taking the pressure off
you when it comes to the "wealth paradox."
For the affluent, matters can become uncomfortable
when beginning the legacy process with their children. A wealth
manager can help guide you in developing your strategy as well
as competent stewards of wealth, or, in other terms, money-smart
kids.
To many people, asset management and tax avoidance
are the most confusing and complicated aspects of wealth management,
so they hire professionals to handle these issues. Legacy planning,
in the minds of many of the affluent, means contacting an estate
planner to establish trusts and foundations.
But who is educating the heirs on their responsibilities
to manage this estate? Should they be left out of the management
until they inherit the estate? Or is the parent responsible for
having the children educated early on?
Here is a case in point. A successful businessman
actively involved in politics and philanthropic ventures, whose
face has graced numerous magazine covers and news broadcasts,
as well as several books, did not have a problem making money
or managing his wealth. The risk to his estate was that he did
not establish guidelines for his children.
One of his sons had challenges, most of which emanated
from money management. It could be said that he was a terrible
money manager and really didn't comprehend the value of his father's
contribution to the family. His siblings were constantly questioning
their father about giving their brother more than they received.
The father has been heard to say "people should
never forget to teach their children the true value of a dollar."
Those who knew him well believe this was his way of saying, "I
should have taught mine better."
As wealth managers, we hear these stories every
day. Our responsibilities are not limited to growing your portfolio
and managing your future financial success.
Here are three points we emphasize.
- Mentoring your children to be competent stewards (money-smart
kids) is no easy task.
- A wealth manager should have the tools to help you mentor
your children to ensure your family's legacy.
- True happiness comes from enjoying your wealth during your
lifetime and knowing that the family legacy will continue for
generations.
Wealth management takes experience and thinking
outside the box to protect and maintain what our clients have
worked so hard to obtain.
A wealth manager's role is to leave no stone unturned.
His role is to know and understand everything about you and your
family to make your plan work.
His goal is to service all your needs and allow
you the mental freedom to know that your legacy is constantly
being planned, monitored and pursued while you are out enjoying
your life.
Christopher G. Snyder and Haitham "Hutch"
E. Ashoo are principals of Pillar Financial Services in Walnut
Creek. Contact them at 925-356-6780.
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