How to Share Wealth Without Creating Entitlement
For affluent families, wealth opens the door to undeniable advantages from elite education, global experiences, and the freedom to pursue passions. But it also presents a quieter challenge: how do you offer these opportunities without fostering entitlement?
It’s a question many of our clients face, especially those who built their wealth from the ground up. You want your children to inherit your values, not just your balance sheet.
The Double-Edged Sword of Wealth
As Tom McCullough of Northwood Family Office puts it in his Chairman’s Message: Kids and Money, “we want to raise grounded people – but we know that significant wealth can either support that goal or undermine it.” Teaching children to manage wealth; emotionally, intellectually, and ethically, is as important as the wealth itself.
Recognizing the Entitlement Trap
In his Harvard Business Review article, “Keep Your Kids Out of the Entitlement Trap,” John Coleman outlines key warning signs:
- Lack of gratitude: Expectations without appreciation.
- Avoiding responsibility: Relying on others to solve problems.
- Low resilience: Struggling with failure or discomfort.
Entitlement is best addressed through intentional parenting: clear expectations, modeled behaviour, and keeping open lines of communication.
Start with the Why
Before discussing trusts or inheritances, clarify your family’s philosophy on wealth. Is it a tool for freedom? A vehicle for impact? A symbol of stewardship?
When wealth is grounded in values like philanthropy or entrepreneurship, it becomes more than consumption. As one second-gen client said, “Once I understood that our family’s wealth wasn’t about luxury but about impact, I felt responsible for using it well.”
Create Earned Opportunities
Establish frameworks that reward effort. Match their summer job earnings with a TFSA contribution. Invite your child to pitch a business idea to a family investment committee.
Family councils, philanthropy boards, and next-gen retreats can also reinforce responsibility and help younger generations connect wealth with purpose.
Let Them Fail Safely
Resilience doesn’t come from comfort; it comes from adversity. Affluent families are uniquely positioned to create safe-to-fail environments. Whether it’s supporting a child’s first (risky) venture or encouraging independence in problem-solving, these are experiences that build character.
Talk About It Early and Often
Avoiding money conversations doesn’t protect children; it leaves them unprepared. Instead, start early with age-appropriate discussions about earning, saving, and giving. Over time, expand into topics like investing, taxation, and legacy planning. McCullough notes, “most of us spend far more time preparing the month for the heirs than preparing the heirs for the month. It’s time to reverse that.”
The Bottom Line
It’s tempting to express love with provision. But the most enduring gift you can give your children is the ability to navigate life with humility, resilience, and purpose.
By anchoring wealth in values, encouraging effort, creating space for growth, and speaking openly, families can pass on more than financial capital; they can pass on character.
