As The New York Times reports, many Americans view those who inherit large sums of money as “democracy’s version of royalty.” However, those who actually inherit the large sums are singing a different tune. Many inheritors report that their various windfalls negatively impacted them.
According to chief wealth advisory officer Coventry Edwards-Pitt, many of her clients do not speak to their children about their inheritance because they believe it will cause the children to become less motivated. However, silence on the issue often leads to young adults who are unable to adjust to the large sums of money they are suddenly given.
Windfalls are often something that young adults cannot prepare for. As inheritor Jason Franklin, who received a phone call at age 21 asking if he wanted to be on the board of his family foundation recalls, “It caused me to really pause. The reaction I was getting from my friends — it was isolating and confusing.”
Director of solution development at SEI Private Wealth Jeff Ladouceur suggests that if parents are unsure of how their children will react to receiving a large inheritance, they should conduct a little experiment. The parents should give the children a small amount of money now to see what happens. This can be a good indicator of what may occur down the road.