In our final blog offering ‘top tips’ for clients looking to pass money on to their children, we finish with tips 6 and 7: ‘Bring the kids to the meeting’ and ‘It’s not about the money’.
Top Tip 6 – Bring the kids to the meeting
Joline Godfrey, author of Raising Financially Fit Kids, extols the virtue of involving children at some meetings with advisers (financial, legal, accounting and perhaps others) who can deal well with children and who are not condescending.
Godfrey sees these meetings as forming an educational service and perhaps a way to allow children to express concerns or pose questions which they may not feel able to do with parents.
An important part of such a meeting is the liaison prior to the meeting where parents brief the adviser as to what information they want shared and what not.
Certainly, my own experience bears out the value of this. If nothing else, on numerous occasions, my role in family meetings has been almost as chairperson, the meeting providing an opportunity for the family to discuss important issues which they would otherwise have overlooked. Time and again families have later said to me that such a meeting was immensely useful.
Top Tip 7 – It’s not about the money
A Chicago-based psychoanalyst quoted in Fortune magazine remarked that often very wealthy parents pay too little attention to their children’s upbringing: “Rather than give rich parents money advice, I would give them child-rearing advice”.
His comment is along the same lines as the idea that people don’t have money problems, money has people problems!
In their book The Millionaire Next Door – The Surprising Secrets of America’s Wealthy, authors Thomas J. Stanley and William D. Danko talk about emphasising your children’s achievements, no matter how small, and not their or the parents’ symbols of success. And they encourage parents to tell children that there are a lot of things more valuable than money.
This perhaps leads back to an earlier quote from one of our clients: “My instinct would be to just pass the money on and hope that in doing so you also pass on your values – how to use it, the life to lead, the standards to have”.
So where does that leave us? Perhaps after everything we have considered the message is that parents shouldn’t get too concerned about how they pass on their wealth after all. Certainly it makes sense to review the options available, but ultimately, passing on their values is arguably more important.
The value of investments and the income derived from them can fall as well as rise. You may not get back what you invest.
This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice. You are recommended to seek competent professional advice before taking any action.
Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.
Time for a break.
Richard Wadsworth is a Chartered Financial Planner at Carbon. Contact Richard via email on firstname.lastname@example.org or get in touch with your local office.