Parenting in Partnership with Good Advice
The oft-repeated phrase "unprecedented transfer of wealth" has been invoked by estate planners and financial advisors alike to describe the pending inheritance by the children of baby-boomers. But what if they don't inherit that wealth? Several months back, Warren Buffett raised more than a few eyebrows when he very publicly announced a commitment to benefit the Bill & Melinda Gates Foundation, rather than his children, with the bulk of his estate. And he is not alone.
Enter "The Trust Fund Whisperer" as Dr. Lee Hausner was described in a recent article in The Globe and Mail (October 16, 2007), Dr Hausner is a psychologist who, as Siri Agrell so succinctly put it in her article, "is paid to tell families how to avoid screwing up their children with their cash." A lot of cash, that is, if the title of her book Children of Paradise: Successful Parenting for Prosperous Families is anything to go by. Essentially, Hausner challenges what she sees as a culture of entitlement enjoyed by the wealthy elite by arguing in favour of fostering a strong work ethic. Agrell's article provides a well organized summary of Hauser's approach together with some of her key recommendations such as: (i) paying for expenses rather than transferring substantial wealth to a child during their career building years and (ii) when transferring cash, spreading the payments in three installments over a prolonged period rather than in one lump sum.
Certainly, trust and estate practitioners play a key role in implementing such recommendations. The increasing popularity of such estate planning techniques as incentive trusts (detailed in a transcribed podcast and an audio podcast on our website) can be seen as a response to the thesis espoused by Hauser and others.
Thanks for reading,
David
