There are a number of issues that need to be considered, monitored, articulated and planned if this transition is to go through smoothly with no horrible immediate side effects and unpleasant surprises in the future.
When did you find out about money?
If you have only found out in the last year about the family’s wealth, how have you digested this new information? Have you known about the wealth for decades and now that it’s time to receive a share, do you feel it’s too late? There is a need to articulate and understand your own feelings and attitude to the wealth and come to terms with the impending event.
Age matters
If you are under 30 and receiving a large sum, have you really developed into a responsible adult who knows and understands himself at a deep level? If you are in later adulthood, are there personality issues which need ironing out? Money can cloud underpinning issues that may need to be dealt with first.
Your choices are wide open and it can feel giddy
You may have been working incredibly hard until this point but with the forthcoming distribution, will you need to work so hard? If you do not, where will the guiding compass in your life come from? Sometimes walking blind into a snow blizzard without a compass can be scary and with each step you can lose courage and focus.
How grounded are you? Do you know the difference between happiness and pleasure?
If you are happy with yourself and have a good grasp of the suffering of others the transition you are about to go through may not feel like much of a change. However, there is a subtle difference between pleasure and happiness. Pleasures like buying material goods can give short term life enhancement but ultimately it will be the long term personal achievements that will give rise to more meaningful happiness.
How much are you receiving? is it income or capital?
Wealth is a huge blessing but with it comes responsibility. Clearly there is a difference between receiving £200,000, which could help pay off a mortgage, and £50 million, which once you have paid off your mortgage and bought a new car needs time and effort. Is this a once off lump sum or an entitlement you will receive every year? Your mindset will be guided by how much and whether you will receive a distribution again.
How much have you had to go through to receive this money?
How many arguments, fallouts with family members, therapy, and difficult financial times have you had to go through to get to this point? Therein lies your attitude towards the family and the distribution. How much have you had to work and contribute for it? Again understand how you feel and articulate those thoughts.
How do you define success?
Success can be measured, for example, in terms of making money or having excellent interpersonal relations or achieving academic recognition. If you do not feel you have achieved your own definition of success, will the money dilute your ambitions or be the making of you?
How will it affect relationships with other family members? are there strings attached to the distribution?
Are other family members receiving similar sums and if not, how might they feel? Do others know? Will you tell them? If the senior generation is unlocking wealth for the next generation will the relationship between the generations improve or worsen? Are there expectations once the payout has been made and what if those assumptions fall flat?
How prepared and fluent are you in terms of money management and money skills?
Looking after money is a minefield. There are untold investment opportunities and infinite ways to lose money. There are unscrupulous advisers looking to overcharge and sometimes defraud you. The modern paradigm of investing means low trust, often high volatility and achieving a decent return on capital is a tricky feat. How fluent are your money skills and what is your proposed course of action if your skill set is lacking?
Do you have a team of collaborative professionals in place to help you?
You may need a lawyer, accountant, financial adviser, tax adviser, bank and many other new professionals to help you. Do you have these people in place and how well will they work with each other? Are their fees reasonable?
This is a chance to look at real life aspirations in the future.
You have probably never had the chance to consider your own ideal life aspirations. Maybe this is an opportunity to pursue your own deepest career ambitions, personal goals or philanthropic desires.
Starting to give these all issues serious consideration is a way to create the best version of yourself and be prepared to deal with the exciting but often daunting time ahead.
