How you transition your significant wealth to your children is a challenge for many high-net-worth families. We believe philanthropy can play a significant role in helping you transition wealth to your children.
Philanthropy gives you the opportunity to have meaningful conversations about money. Most people find having conversations about money difficult, the same is true of high-net-worth families. Philanthropy gives you the opportunity to start talking about what you value as a family and what your wealth means to you.
Engaging in philanthropy allows you to pass on your values and ethics to your children. By involving them in charitable activities and exposing them to the needs of others, you can teach them empathy, compassion, and the importance of giving back. These values can shape their perspective on wealth and instil a sense of responsibility towards using it for the greater good.
Philanthropy is not just about giving money away. We believe it provides a powerful opportunity to teach your children financial literacy investment skills, crucial to their ability to manage the family wealth later in life. If you choose to start a private ancillary fund (PAF) as part of your philanthropic strategy, the money will have to invested giving your children the opportunity to learn crucial investment skills and participate in investment decisions. It gives them a training ground, before taking on the large responsibility of managing the family wealth.
Establishing a philanthropic strategy can create a structured framework for managing and distributing family wealth. By involving your children in the governance and decision-making processes, you can equip them with the skills and knowledge necessary to manage wealth responsibly. Philanthropy can also provide a platform for collaboration and cohesion among family members. Giving them a focus and a way to learn to work together over time for a greater purpose.
Engaging in philanthropy enables you to shape and preserve your family’s legacy. By involving your children in philanthropic endeavours, you can ensure that your values and the causes you care about are continued beyond your lifetime. Philanthropy gives them a training ground to learn the skills of wealth management and to learn how to work together over time. This can provide a sense of purpose and direction for your children as they take on the responsibility of managing family wealth. If you would like to know more about how to transition your wealth to your children please contact us here.
Kind regards,
Shelley Marsh
Outsourced Chief Investment Officer (OCIO) & Founder
Wealth Differently
General Advice Warning: This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. It does not represent and is not intended to be personal advice. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs. We strongly suggest that you seek professional financial advice before acting.
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