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FUTURE PLANNING


Generation wise


All too often, the skills and values that created wealth in the first place don’t make it through the generations. So how can you help your children to become stewards of the family legacy, so they hand it over in a better condition than when they received it?


W


hile some children see their legacy as something they can develop for the generation after them, others tend to look at it as if it were ‘nothing more than I am


entitled to’. When there is a focus on entitlement, attitudes


sto money become more consumer-like in nature: ‘I have this wealth and I’m going to use it for my own needs’. A sense of entitlement seriously increases the risk of conflict among family members as others become concerned that one might receive more than they deserve. Most of us don’t intend for our children to think like


this, but certain environments cultivate this culture that gives rise to these attitudes. The child who receives almost everything he wants is more likely to have an attitude of entitlement. ‘It is there when I ask, and that should be the way it continues’. Many parents have difficulty talking to their children


about wealth and wealth management. How much wealth do we have? How much do we need? Where did it come from? What do we plan to do with it? This is particularly evident in the Baby Boomer first generation entrepreneur. For many, it’s easier to think, it’s there, and it will


continue to be there. When this message is passed to children, entitlement issues can build within their character.


Issues of entitlement When one of the children has this feeling of ‘this is mine’, ‘the legacy is nothing more than I am entitled to’, then the conflicts are difficult to avoid. I have seen siblings spend millions of dollars in legal battles fighting over legacies which, in many cases, did not justify the


84 FAMILY OFFICE: ASIA TOMORROW


expenditure. In one such conflict, one brother took his own life before the case could be heard. An alternative is the concept of stewardship, where


the beneficiaries think in terms how they can manage the family wealth for the benefit of all family members and for subsequent generations. ‘What is in this for me?’ becomes ‘what is in this for us?’ This is now evident in the use of the family office, a


structure that is becoming better known among families with wealth. In these families, the wealth is pooled for the benefit of all and, often with a goal of improving wealth for subsequent generations.


Shifting mindsets The culture of stewardship requires a different approach. How do you move a family from entitlement towards stewardship? Culture is learned early in the life of a child from the behaviours of the parents. Once the culture is established, it is difficult to change. Where


conflict OFTEN ARISES FROM A SENSE OF


ENTITLEMENT AMONG FAMILY MEMBERS, AS ONE BECOMES CONCERNED THAT ANOTHER MIGHT


RECEIVE MORE THAN THEY DESERVE


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