Demographers and attorneys tell us that something dramatic is about to happen to the baby-boomer generation, which is now approaching fifty years of age. They will soon inherit more than $10.4 trillion as their parents pass from the scene. It will be the greatest transfer of wealth in the history of the world. The question is, how will they handle this sudden affluence'
There may be a clue in a sociological study reported in a book by John Sedgwick called Rich Kids. The author made an extensive investigation of those who inherit large trust funds. He concluded that sudden wealth can be dangerous. For some, not having to work can lead to irresponsible living and addictive behavior, such as gambling and alcoholism. Money can also tear marriages to threads. Finally, absolutely nothing will divide siblings quicker than money, setting up fights over family businesses and resentment of those designated to run them.
There are exceptions to these negative consequences, of course. Some people handle wealth and power gracefully. But it is a risky passage at best and one that requires a great deal of maturity and self-control. At the least, wealthy parents should ask themselves some important questions, especially if their heirs are young. Should they remove the very challenges that helped Mom and Dad succeed in the early daysthe obligation to work hard, live frugally, save, build, and produce by the sweat of their brows? And even if their sons and daughters are able to handle a generous inheritance, how will their grandchildren and future generations respond'
I know my views on this subject are unconventional. One of the reasons people work hard is so their children and future heirs wont have to. They love their kids and want to make things easier for them. Even so, giving a large trust fund to those who dont earn it should be done only with the greatest care and preparation.
It takes a steady hand to hold a full cup!