Rupert Lee-Browne, the chairman and chief executive of payments fintech Caxton, founded the company in 2002. In a recent article, he discusses the importance of legacy wealth planning and how it often gets treated with kid gloves, despite the universal wisdom of the proverb, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” Lee-Browne argues that oversensitivity or silence around financial succession can lead to problems down the line for heirs who may feel unready and overburdened by the responsibilities of coming into money.
When preparing to pass on wealth, many focus on tax, legal, and fund management aspects, which are important for a smooth transition but overlook the emotional and psychological impact of inheriting money. Lee-Browne stresses the need for broader conversations about inheritances that are shaped by personal experiences and knowledge that cannot be found in a textbook. Soft skills and coping mechanisms need to be in place for younger generations to manage their legacies with confidence for the long term, not just in the short term.
Lee-Browne offers tips to help children cope with inheriting money, such as separating the familiar from the financial by giving them an allowance without a parental safety net and providing opportunities for them to earn money. Setting out a succession plan helps prepare children for receiving an inheritance and clarifies expectations while preventing ambiguity and potential tension among family members. Being a positive financial role model and teaching important concepts like taxation and inflation can help shape their future and instill responsible habits.
Discussing family wealth openly and in context can break traditional societal taboos around talking about money within families and help children understand their financial heritage. Encouraging a positive mindset and an active approach to financial management is essential for children who inherit wealth to be responsible stewards while also seizing lucrative opportunities and overcoming future challenges. Lee-Browne emphasizes the importance of educating children about calculated risks, investment horizons, and the willingness to make mistakes in pursuit of financial goals.
It is essential to consult with licensed professionals for advice concerning specific financial situations as the information provided in the article is not investment, tax, or financial advice. The Forbes Finance Council, an invitation-only organization for executives in successful accounting, financial planning, and wealth management firms, offers valuable insights and resources for those seeking guidance in managing inheritance and wealth planning effectively.
