A Development Plan for the Next Generation

In the January 2012 edition of Family Business Magazine, Relative Solutions principal Fran Lotery details critical questions that emerge as family enterprises anticipate a future generational transition, including:

• What does the next generation need to be prepared for?

• How big is this challenge, and how will it be met?

• What is the priority? Is it to develop the human capital of the family or future leaders, or a combination of both?

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Overcoming Entitlement and Raising Responsible Next Generation Family Members

Not too long ago the greatest concern of wealthy parents’ was that their wealth would act as a negative force for their children, leading them to feel entitled and preventing them from productive work and livelihood. Since the financial crisis, many of these families are experiencing a change in the availability and even the loss of their assets and thus a change in current and future wealth. This inflection point has created an opportunity for them to examine how they want to raise their children vis à vis wealth. For some families, the financial meltdown requires they also take a hard look at their present lifestyle and make certain changes too. What happens when you continue to live and feel affluent, when in fact your net worth may have been reduced by a quarter, half or more? Is the potential negative force of wealth still great when the expectation may still be present and the full asset availability is not? What is the difference when the assets for which a young person felt entitled no longer exist in the same fashion?

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