Values-based legacy planning: your best vaccine against "affluenza"

There is an epidemic known as “affluenza” occurring in America that is affecting large numbers of more affluent families. Affluenza is defined as the dysfunctional relationship with money, wealth or the pursuit of it.

One of the more commonly observed effects of Affluenza can be witnessed in the manner in which inheritors of wealth squander their new found bounty. According to a recent study* 65 percent of all family wealth disappears at the end of the second generation and 90 percent at the end of the third generation. Psychologists believe that the cause of this syndrome is rooted in the failure of the wealth creators (the parents) to properly communicate to their children and heirs how they would like for them to treat their inheritance. As a result, the inheritors lack any vision, guidance, or direction and oftentimes fall prey to irrational and extravagant spending habits.

At WSG we now have a process for addressing this issue. It is called values based legacy planning, which is operating through a separately formed business entity called Generation to Generation LLC. This process is a comprehensive facilitated coaching experience designed to guide the wealth creators through a process of self discovery so they can identify those values that are important to them and which they want to pass on to their children. These values are then committed to a written vision statement and presented to the children for their education and understanding. The process also includes several exercises and activities designed to teach the children how to responsibly manage wealth and how to work together as a family unit in making decisions consistent with the goals and values imparted to them by the vision statement.

*Source: “Family Wealth Counseling” by E.G. Jay Link.

**Not an NPC affiliate