Kids Need To Understand Why They Inherit Wealth, Not Just How Much
Michael Farrel is a wealth manager to millionaires and recently stated that he believes there's much more to inheritance than handing over money, according to Business Insider. Individuals often miss the crucial point of talking about it.
Farrell is the managing director of SEI Private Wealth Management, whose typical client is worth at least $10 million.
"We tend to work with a lot of first-generation wealth creators. They have a bit of a blue-collar mentality about their wealth, meaning they created it and they value that."
"These are successful people who've put strategy in place their entire life and executed it. Then all of a sudden it gets to their money and they go, 'Nope, they'll just find out when I'm gone.' And I go, really? Like, how's that possible? Why would you want them to find out when you were gone? Wouldn't you want them to know so that they understand?"
A 2015 study conducted by SEI reported that nearly a third of parents who planned to pass down money did not communicate with their children about it. The Study found only 15 percent of heirs were informed on the specifics of their inheritances while 50% knew only the basics.
Farrell stated that it's common for young people to feel burdened by wealth or ill-equipped to handle the responsibility. He recommends that individuals talk about their vision for their money and the best uses for it, to help create a purpose.