Family Wealth
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The Purpose of Wealth – A Mini Masterclass for Families of Wealth
In this episode of The Purpose of Wealth, renowned family wealth consultant, educator and psychologist Dr. Jim Grubman(opens in new tab) sits down with host Narelle Hooper(opens in new tab) to dismantle the fear-based narratives surrounding intergenerational wealth transfer.
Listen here(opens in new tab) or here(opens in new tab).
Classic Article Outlining Characteristics of Wealth Acquirers and Inheritors
(opens in new tab)This article(opens in new tab) was the first comprehensive review of the psychology of wealth literature early in the field. It also introduced the now-classic metaphor that wealth acquirers are like immigrants to the proverbial Land of Wealth while inheritors are more like natural-born citizens or natives of wealth. It summarized the perspectives on wealth at that time, providing insights and recommendations for understanding the similarities and differences of wealth’s acquirers and inheritors. Some commonly-accepted principles about the ephemeral nature of wealth across generations – the “shirtsleeves to shirtsleeves” adage – have now been shown to lack foundation. However, the remainder of the article remains helpful today.
A Resource on Choosing a Family Consultant
The process of finding, interviewing, selecting, and working with a consultant concerning family wealth or family enterprise issues is a difficult one for many families. There are few resources in the industry to guide families along the way. This handout, based on extensive experience, helps outline the steps involved and how to navigate toward a successful outcome.
Helping Grandchildren (and Children) Learn Good Money Skills
(opens in new tab)Great role models can help foster crucial skills and attitudes about money for the next generation. This article(opens in new tab) for the Pitcairn Family Offices client newsletter provides down-to-earth advice for grandparents wanting to help their grandchildren learn about money and ultimately about wealth. It applies equally well to parents looking to build money skills with their young children.
A New Perspective on the Second Generation in Family Enterprises
The second generation (G2) in family enterprises is often maligned or written off as never quite good enough, compared to the dynamic wealth creators in the first generation (G1). A more balanced view of G2 was the subject of an online article in Harvard Business Review by Jim Grubman and Dennis Jaffe. The article provides insight into the importance of G2 in transitioning many family businesses from the dynamic growth in G1 to a more sustainable, family-centered enterprise for future generations.
Encouraging Clients about Inheritance Conversations
(opens in new tab)Many estate plans and wealth transfers fail, not because of technical problems with their design but because family dynamics and communication problems get in the way. It’s crucial for beneficiaries to be ready to receive wealth transfers and gifts with skill and gratitude. Otherwise, the best-laid inheritance plans of wealth creators and their attorneys will not succeed. This article discusses these issues for both advisors and families.
The Financial Skills Trust
(opens in new tab)In this two-part series from the Journal of Financial Planning, two wealth consultants (Jim Grubman and Eileen Gallo) and a prominent attorney (Jon Gallo) propose a fresh way to look at incorporating modern principles of financial education with careful trust design.
Part I(opens in new tab) outlines the many problems inherent in incentive trusts and offers a much more helpful alternative: the Financial Skills Trust (FST). This approach to trust design integrates estate planning with what experts have learned over the past thirty years about the most important financial skills needed in adult life.
(opens in new tab) Part II(opens in new tab) further delineates the principles and procedures behind the Financial Skills Trust and the Results-Oriented Trust Environment™ (ROTE™). The FST helps provide a thoughtful solution to the dilemmas of “fair versus equal” in estate planning for parents when most heirs show responsible financial behavior but at least one does not. The FST has been implemented in many estate plans since its first description back in 2010.
Family Money: Something Secret or Simply Private?
(opens in new tab)Affluent parents possess much information that children eventually need to know. Yet, many families avoid talking about money. Some families think it is wrong, some worry about the consequences, many just don’t know what to say. Unfortunately, staying silent about this important topic can have far-reaching consequences. Children are left in the dark about how to think about money or handle their finances, creating needless mystery and anxiety around money. This article(opens in new tab) helps clarify the differences between healthy privacy and unhealthy secrecy, allowing families to face anxieties and break the silence around money.
Contact Me
Dr. Grubman is no longer accepting new consulting engagements with clients. He welcomes correspondence from individuals, advisors, and colleagues exploring the ideas in his books, publications, and presentations.