Avoid Pitfalls of Leaving an Inheritance, with Lee Hausner

In this episode of the Money Advantage podcast, we explore how to avoid the pitfalls of leaving an inheritance and ensure you leave a positive impact on future generations through intentional wealth management and legacy planning.

Inheritance, a transfer of wealth from one generation to another, can be a double-edged sword. On one hand, it can provide financial security and opportunities for the next generation. On the other hand, if mishandled, it can lead to family conflicts, spoiled children, and the squandering of hard-earned fortune. We explore the insights of Dr. Lee Hausner, a renowned consultant to high-net-worth families, family businesses, and family offices, on how to avoid the pitfalls of leaving an inheritance and ensuring a positive impact on future generations. We delve into the importance of understanding the power of money, the various types of wealth present in society, and the significance of instilling the right values in the next generation of wealth holders.

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Avoiding the Pitfalls of Leaving an Inheritance

Dr. Lee Hausner’s background as a psychologist in the Beverly Hills school district exposed her to the effects of different types of wealth on families. She observed first-generation entrepreneurial wealth, trust fund wealth, and industry wealth, each with its unique set of challenges and expectations. This experience, coupled with her expertise as a consultant to high-net-worth families, has given her valuable insight into the potential pitfalls of leaving an inheritance.

One of the key challenges in wealth transfer is finding the right balance between providing financial security and ensuring that the next generation does not become complacent or entitled. Overindulgence and a lack of understanding of the value of money can lead to destructive behaviors and a squandering of family wealth. Dr. Hausner emphasizes the importance of raising children who are competent and self-confident, regardless of their financial situation. This foundation will help them navigate the complexities of wealth management and inheritance, ultimately leading to more successful and prosperous families.

Wealth Transfer and Legacy Planning

A successful wealth transfer and legacy plan requires intentional and strategic planning. Dr. Hausner suggests that families think of themselves as a business, applying the same strategic planning techniques to their family life as they would to their professional endeavors. This includes setting goals and strategies, holding family meetings, and fostering a culture of open communication and collaboration.

In addition to teaching children about the fundamentals of money management, it is crucial to instill the right values and work ethic in them. This can be achieved through a combination of education, experience, and mentorship. Dr. Hausner also highlights the importance of being strategic about when and how much to pass on to the next generation. A well-planned wealth transfer will take into consideration the needs and abilities of each family member, ensuring that the resources are used productively and effectively.

Strategic Planning for Family Legacy

Creating a successful family legacy requires a clear vision and a strategic approach to wealth management. Dr. Hausner recommends reverse-engineering the desired family outcome and breaking it down into achievable goals and milestones. This process should involve open and collaborative discussions among family members, ensuring that everyone’s needs and aspirations are considered.

One of the perennial concerns in wealth distribution is the issue of equality. Dr. Hausner suggests that families should focus on giving recipients what is beneficial, rather than simply striving for equal distribution. This approach ensures that each family member receives the resources and support necessary for their individual success, without fostering resentment or rivalry.

Additionally, selecting the right trustees and advisors is critical in ensuring a smooth wealth transfer and effective management of family assets. The next generation must be equipped with the knowledge and skills to take on the responsibility of managing the family’s wealth and continuing its legacy.

Creating Successful and Prosperous Families

Dr. Lee Hausner’s wealth of wisdom on family business succession and legacy planning highlights the importance of creating a strong family culture and helping the next generation become competent and self-confident. Being intentional in the business of the family, setting goals and strategies, and holding regular family meetings are crucial to ensuring the success of the family and its legacy.

Legal documents and estate plans can provide a framework for wealth management, but they cannot guarantee the success of a family’s legacy. The family culture, values, and relationships are ultimately more important than a perfect estate plan. Dr. Hausner encourages families to prioritize these aspects of their legacy and to reach out to professionals if they need guidance and support.

Sibling Competition and Social Competency

Helping children develop their own unique strengths and interests, rather than pitting them against one another in competition, is an essential aspect of fostering strong family relationships and a successful wealth transfer. Dr. Hausner shares her experiences of helping siblings find their individual paths and avoid unnecessary rivalry. Encouraging children to participate in different extracurricular activities and providing opportunities for collaboration and support can help foster strong connections between siblings, ensuring a lasting family legacy.

About Dr. Lee Hausner

Dr. Lee Hausner is an internationally recognized psychologist, business consultant, seminar leader and keynote speaker. Dr. Hausner served 17 years as the senior psychologist for the Beverly Hills Unified School District during which time she authored the seminal work regarding wealth and the family, Children of Paradise: Successful Parenting for Prosperous Families. She has co-authored with Douglas K. Freeman, J.D. Legacy Families: The Definitive Guide to Creating a Successful Multi-generational Family and an A Founders Guide to the Family Foundation. Most recently she contributed chapters to the resource books, Wealth of Wisdom, the top 50 questions wealthy families ask and More Wealth of Wisdom.

Dr Hausner co-founded IFF Advisors a consulting practice providing services for high net-worth families, family businesses and family offices. She incorporated a unique six-step transition model for effective succession of family businesses in her critically acclaimed family business resource book, Hats Off to You: Balancing Roles and Creating Success in Family Business Succession.

A frequent guest on national media, a quoted expert in national publications, a keynote speaker for high-net-worth private client conferences for the major financial institutions domestically and internationally, she is also a highly rated resource to YPO, WPO, CEO, EO, Tiger 21 and was a presenter at the Davos conference in Switzerland.

Book a Strategy Call

Navigating the pitfalls of leaving an inheritance, complexities of wealth transfer, and family legacies can be challenging, but with the right approach and guidance, it is possible to create successful and prosperous families. By understanding the power of money, instilling the right values in the next generation, and adopting intentional and strategic planning, families can ensure a lasting and positive impact on future generations.

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