Coventry Edwards-Pitt, Ballentine Partners’ Chief Wealth Advisory Officer, blogs on Forbes.com, “4 Critical Skills Your Child Needs to Develop Before Inheriting Your Money.”
As a financial advisor to wealthy families, I’m often asked how old a child should be before he or she gains access to inherited money or receives significant financial gifts. The truth is, age is a poor barometer of readiness. Knowing this, wealth advisors have long encouraged parents to leave their money to trust, with a wise (hopefully!) trustee in place who is often given total discretion to assess whether children are able to handle receiving money from the trust. But what exactly should trustees look for to make this assessment? And if it’s parents who are still in the giving role (in the form of annual or lifetime gifts), how do they know if their children are ready? How do they decide if a gift might help their child or in fact delay the very maturation they are hoping to promote?
It turns out there are 4 critical skills that children need to develop before they are ready to receive money from their parents or a trust. I uncovered these through the interviews I conducted with successful inheritors for my book Raised Healthy, Wealthy & Wise. It turns out that all of the successful inheritors I spoke with (successful meaning self-motivated, productive, and content) had developed these skills. And you’ll probably recognize, if you happen to know anyone raised with wealth who isn’t yet successfully launched into an independent and productive life, that he or she lacks one of these critical four.
Learn more about Coventry Edwards-Pitt.