- “There are four major kinds of family wealth: human, intellectual, social, and financial.” Wealth in Families Third Edition (Charles W. Collier) Page 8
- ““Most families are only aware that they have one form of capital: financial capital,” says James E. (Jay) Hughes, Jr., an estate planning lawyer and family governance specialist in New York, author of Family Wealth: Keeping it in the Family. Hughes is a proponent of the four forms of family wealth: “A family must know whether all of its forms of capital are growing. Rarely in my experience do families measure their human, intellectual, and social capital. Frequently, members do not even recognize that they own these forms of capital.”” Wealth in Families Third Edition (Charles W. Collier) Page 8-9
- “Successful families make thoughtful choices around their wealth and think about the effect of their decisions on the lives of their children and their spouses, and their grandchildren. Most importantly, they talk openly with their children, at age-appropriate times, about all the issues surrounding the four components of the family’s true wealth.” Wealth in Families Third Edition (Charles W. Collier) Page 9
- “In my experience, the best practices of successful families include the following:
- They focus on the human, intellectual, and social capital of their family.
- They stress the priority of each family member’s individual pursuit of happiness.
- They work on enhancing intrafamily communication.
- Their time frame for determining success is long-term.
- They tell and retell the family’s most important stories.
- They create mentor-like relationships when establishing family trusts.
- They have collaboratively defined a family vision statement (the Shared Dream).”
- They teach children and grandchildren the competencies and responsibilities that come with financial wealth.
- They work at getting to really know each family member.
- They give their younger family members as much responsibility as they can manage as soon as possible.Of course, no family achieves all of these objectives, but attempting to do so is a goal to which any family can aspire over a lifetime.”Wealth in Families Third Edition (Charles W. Collier) Page 9-10
- “In discussing his views on the uses of a financial inheritance, the late Robert G. Stone, Jr., chairman emeritus of the Kirby Corporation in New York and former Senior Fellow of Harvard College, said it well: “I believe in giving your children enough money so they can follow whatever pursuit they want in life. If they want to be teachers or artists, I hope they will be the best they can be in those fields. Having money gives them freedom of choice with security, no matter what direction they decide to take.”” Wealth in Families Third Edition (Charles W. Collier) Page 26
- “The decision on how much to give or leave your children is a deeply personal one, and there are many variables, including individual preferences and specific family situations. Having said that, and admitting there are no rules of thumb, I’ll make some observations using hard numbers. In my experience, with families where the publicly traded financial wealth is in the range of $15 million to $30 million, the opening number is typically $1 million to $2 million per child. In most cases, the amount provides a measure of flexibility, but it may not dramatically change the child’s lifestyle. Also, I see many people deciding that $3 million to $5 million is an appropriate financial inheritance. For families with approximately $100 million and above, many believe that $10 million to $15 million per child is sufficient. Finally, for families with a new worth greater than $500 million, the inheritance often ranges from $25 million to $50 million or more.” Wealth in Families Third Edition (Charles W. Collier) Page 27
- “People don’t think about the question of whether a spouse without money ought to have his or her own money so they don’t have to ask for it,” said Dick Watson. “I ask wealth holders-typically husbands-if their spouse has money of their own, and the response is often, ‘No, but she can have whatever she wants.’ I suggest he give his wife a significant amount of money so that she doesn’t have to ask. This is often a transforming experience, changing the power and trust in the relationship for the better.”” Wealth in Families Third Edition (Charles W. Collier) Page 32
- “More communication is almost always better. Talking to your children early about the meaning and purpose of your family wealth can also enhance your relationship with your children.” Wealth in Families Third Edition (Charles W. Collier) Page 32
- ““Turn around the government’s default plan,” Englund adds, “and you decide, in consultation with your children, how to organize your family’s financial wealth. A wonderful part of this whole approach is that your children talk to one another. The expression of this concept will vary from family to family, but what a powerful dialogue. What an opportunity for your family!”” Wealth in Families Third Edition (Charles W. Collier) Page 32
- “Entrepreneurial parents have said to me, “I have a seven-year-old child, and we’re flying in our private jet to Jackson Hole. I’m worried about the message I’m sending my child. How do I raise children with a balanced view of our family wealth?”This is a big challenge. What the parents might say is, “We happen to be extremely fortunate, and we have this jet that we can use on special occasions. Most people are notable to use this airplane, and we do not talk about it because it will make people feel unhappy or jealous. This is a luxury item that is available because your mom or your dad worked very hard.”” Wealth in Families Third Edition (Charles W. Collier) Page 46
- “That is one joy of having money: you can give your children all the tools that they need to be competent and independent adults.” Wealth in Families Third Edition (Charles W. Collier) Page 52
- “Grade school, ages 6 to 12
- Discuss caring for possessions.
- Structure an allowance: Most experts suggest a modest amount for being part of the family and doing certain basic household chores.
- Provide jobs for pay.
- Encourage long-term savings: Consider matching any money they will save for over a year.
- Set limits around money, for example, not buying everything they want when you go shopping.
- Introduce philanthropy: Help them to give and take them on site visits.
Teen years, ages 13 to 18
- Insist on summer employment; fund their Roth IRA.
- Guide them through their budget and a 1040 tax return.
- Advocate smart consumerism: For example, discuss the messages in advertising and the impact of advertising on their purchases.
- Discuss the intelligent use of credit cards and checking accounts.
- Explore investments on the Internet.
- Engage them in philanthropy: Encourage site visits and include them in evaluating gift decisions.
College years, ages 18 and over
- Work with them on a college spending budget.
- Insist on summer employment and fund their Roth IRA.
- Set up adviser-facilitated learning about investments.
- Provide money for them to manage.
- Explain the roles of trustee and beneficiary, if trusts are used in your family.
- Engage them in philanthropy; add them to the board of your philanthropic fund.”
Wealth in Families Third Edition (Charles W. Collier) Page 55-56
- “Our parents were clear about the dual purpose of the wealth: to enable us to live well while pursuing diverse careers and to allow us to support causes we cared about.” Wealth in Families Third Edition (Charles W. Collier) Page 57
- “Family stories are vital to the well-being of a family and need to be told time and time again. They provide a view of the family’s history and send a message to the children, in-laws, and grandchildren that they belong and that their family is unique. The next generation gains a sense of the vital “differentness” of their family. Moreover, one reason for the proverb “shirtsleeves-to-shirtsleeves in three generations” being true is that the individuals in the third and fourth generations often have no connection to the source of the family’s financial wealth. They have no idea what it took to create the money they must now steward. Family stories keep that connection alive for many generations.” Wealth in Families Third Edition (Charles W. Collier) Page 82
- “The real wealth of your family is not financial. Because of this, your individual principles and family’s vision should be discussed before implementing various estate planning strategies.” Wealth in Families Third Edition (Charles W. Collier) Page 91
- “Because I believe that the true wealth of your family is not financial, I think that you should first discuss the principles that will guide your decision about how much to give your children. Wealth in Families Third Edition (Charles W. Collier) Page 111
- “Engage all of your young adult children in conversations about the distribution of your financial wealth. Planning for a possible prenuptial arrangement is both a legal process and a family process. Meaningful conversations over a period of time can be an opportunity for strengthening the family and addressing difficult topics with openness and respect. In the long run, these “breakthrough conversations” can be enormously informative and useful all around.” Wealth in Families Third Edition (Charles W. Collier) Page 117-118
- “More communication is almost always better. Talking to your children early about the meaning and purpose of your family wealth can also enhance your relationship with your children.” Wealth in Families Third Edition (Charles W. Collier) Page 32
- “Family stories are vital to the well-being of a family and need to be told time and time again. They provide a view of the family’s history and send a message to the children, in-laws, and grandchildren that they belong and that their family is unique. The next generation gains a sense of the vital “differentness” of their family. Moreover, one reason for the proverb “shirtsleeves-to-shirtsleeves in three generations” being true is that the individuals in the third and fourth generations often have no connection to the source of the family’s financial wealth. They have no idea what it took to create the money they must now steward. Family stories keep that connection alive for many generations.” Wealth in Families Third Edition (Charles W. Collier) Page 82