More Than Money
Issue #32

Passing the Torch: The Great Wealth Transfer

Table of Contents

“The Role of the Trustee”

A Conversation with Elizabeth Glenshaw

I once had a client (a husband and wife) at one of the firms I worked with who had a $40 million net worth. The husband felt his life had been severely compromised when he inherited all his money, so he and his wife chose to pass down only $200,000 to each of their children. I was later asked to work with the children of that couple, with the idea that I would support them in developing good financial habits.
Each child had very different feelings about what the parents had done, yet there were shared questions: Why was I not worth more? How do I manage a lifestyle so different from my parents’ life and the one I grew up in? How do I talk with my children about our family and its vast differences in terms of wealth?
The children spent many hours with me trying to understand the mixed messages they had received, and were continuing to receive, about their family’s financial wealth. For example, the grandparents liked to take their grandchildren on exotic trips and shower them with the good fortune that wealth can bring. What message was being sent with these actions? Was this healthy? The children clearly perceived it as a mixed blessing. In particular, they worried that the grandparents were exposing their grandchildren to a lifestyle they probably would not be able to attain.
As financial advisor to the parents and then, later, as trustee to the adult children, I found myself in the middle of this family dynamic, which raised many questions for me. Yet as advisor and trustee, my role was to be a good steward of the assets for the benefit of the individuals I was contracted to support. In that role, I have to be careful not to be judgmental, not to take sides, and to help my clients think about who they are, what they want in their lives, and how their resources can or can’t help them accomplish their objectives. If they can’t do what they’re trying to do with their resources, I help them figure out what other avenues they can take to get there. I hope to free them of the constraint the wealth can be in their lives.
During my professional career, I have often had to introduce new inheritors to their wealth and, at the same time, ask them to draw up a will and think about what they want to do with their assets when they die. I’ve seen people handle it wonderfully and others not well at all. One couple I worked with had three young children. They were willing to start early on to have family meetings with the kids. We would sit down and talk about their accounts and give the children a chance to participate. I love Charles Collier’s idea that you start talking to children when they’re young, and at some point you bring in an advocate for the kids—not just your own lawyers and investment advisors, but someone who will advocate for the child. (See “Resolving Family Differences: Asking the Big Questions,” in More Than Money Journal , “When Differences Divide: Resolving Family Tensions Around Money,” Issue #30, pp. 12-14.)
The way I see it, you can’t prepare people in a two-hour meeting to even begin to understand the role this wealth has or doesn’t have in their lives. It’s lifelong learning. I say to my clients: Start early, talk often, and work on gaining your own understanding of the wealth in your life, so you don’t pass on your baggage to the kids.


For related information, see:
Incentive Trusts: Responsible or Controlling? ,” More Than Money Journal, “Effective Giving,” Issue #26, Spring 2001, pp. 7-8.

Trust Funds: Blessing or Curse? ,” More Than Money Journal, “Money and Children,” Issue #9, Autumn 1995, pp. 6-7.

Twelve Ways to Keep Trust Funds from Messing Up Your Kids ,” More Than Money Journal, “Money and Children,” Issue #9, Autumn 1995, pp. 8-9.

Talking with your children about money is an ongoing conversation that should be a normal part of your everyday life, like going to school, having dinner, or learning a new sport. Listen to the questions your children ask you. (They do ask you money questions, whether they sound like “money questions” or not.) Then really answer their questions. My daughter recently asked, “Can I get an allowance? My friends do.” It gave me the opportunity to engage her in a conversation, letting her participate in a discussion of what that allowance would mean. What would the allowance be used for? Should it be earned by doing chores or not? What did her friends do with their allowance? Should some of the allowance go to savings, to a giving pool? You may be pleasantly surprised by the conversations you will have with your children and how it will challenge your thinking.
—Elizabeth Glenshaw
Elizabeth Glenshaw is a senior associate with the Calvert Foundation, which provides community investing opportunities throughout the world. Prior to joining the Foundation, she managed portfolios for individuals and families that integrated social criteria as an essential investment objective. She crafted the Socially Responsible Banking Fund for Vermont National Bank (now Chittenden Bank), which makes flexible loans in the areas of affordable housing, education, sustainable agriculture, downtown revitalization, environment, and small business development.


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