Family office consultant Joe Reilly interviews Barbara Blouin on the twentieth anniversary of her landmark book The Legacy of Inherited Wealth, a book where heirs talk about their experiences, in their own words, often over a lifetime.

Family Wealth Report does not necessarily share the views expressed below, but, as ever, is grateful for the right to publish them and welcomes reader responses.

Joe Reilly: Robert Coles, in the introduction to your book, says that those with money often yearn for things money can’t buy such as self-respect.  With that in mind, what do you think wealth advisors need to know about their inherited wealth clients?

Barbara Blouin: People who have already received an inheritance, or are about to come into money, are just like everyone else: they long for self-respect. The risk that wealth advisors run is that they miss the human part of their role. They overfocus on the financial aspects, such as how to avoid losing their wealth (even squandering it), how to keep it and make it grow, how to legally avoid taxation, how to coach families to work as a team, how to protect themselves from those who want to take advantage of them. While these issues are important, they miss the point. It is more important to help new inheritors, in particular, develop self-respect.

Joe Reilly: What was the most unexpected thing you learned from all your interviews with heirs?  

Barbara Blouin: When I started interviewing inheritors, I had no idea what to expect. In my life of 55 years up to that point, I had determinedly avoided other rich people. So doing interviews was heading into unexplored territory. Since I didn’t have clear expectations, I’ll just say that what I learned is how often inheritors find their inheritances a burden, not a blessing. Or, at best, it’s a mixed blessing. The burden part can be overcome up to a point. The blessing can be nourished.

This is a complex subject. I recommend that you read The Legacy of Inherited Wealth and Labors of Love: The Legacy of Inherited Wealth, Book II. Taken together, these 27 true accounts dig deeply into these complex issues. Recently I received an order and sent (as usual) a brief personal thank you for the order. I got a reply: “I was happy to come across this resource as I just came across a large inheritance last month and it is harder than I ever imagined. It is nice to know I am not alone in my difficult feelings.” This comment reflects the experiences of many inheritors, especially younger ones. I know nothing about the customer who wrote this, but I do know that many heirs have not been prepared for their inheritances.

Though there are notable exceptions, many wealthy parents do not know what to say to their children, or how to prepare them. They may feel embarrassed by their wealth; they may be inhibited by the taboo that says, “Don’t talk about your money.” If the money is “old money,” the parents themselves may not have been prepared for their own inheritances. All the same, I think things are heading in the right direction. More parents are finding ways to break the news, and do it skillfully, with the help of professional wealth advisors. Some institutions, such as banks, have short programs for young inheritors. But even with preparation, it’s still a shock to get an inheritance, and a shock that can strongly influence young heirs—how they feel about themselves, how they imagine their role in their lives, especially when they are just on the threshold of adulthood.

Joe Reilly: What advice would you give for those marrying into money, or conversely, what do you tell inheritors marrying those without money?

Barbara Blouin: I think this is the biggest risk both for those marrying into money, and for inheritors marrying those with much less money. From day one it is not a level playing field. The kind, and degree, of risk is also affected by gender differences: men marrying wealthy women are more at risk of failing to begin, or maintain, a meaningful and satisfying career. Most of the time, when a man of modest means marries a rich woman, his wife’s assets and income dwarf whatever he can earn. Conversely, a wealthy woman who marries a man who isn’t wealthy can all too easily begin to doubt whether she has been married for her money (and she may well be right!) It’s a temptation for a man to marry money and can easily undermine a man’s character. The best way to deal with this situation is to find a competent professional to work out a prenuptial agreement with the active participation of both partners before the wedding. However, while helpful, prenups are no guarantee. I don’t know if anyone has done a quantitative analysis, but it’s my guess that such financially unequal marriages end in divorce more often than more financially balanced marriages.

Joe Reilly: What was your own experience with receiving an irrevocable trust when you were young?

Barbara Blouin: I didn’t know what kind of trust I had because no one ever told me anything before the document came in the mail. Even if I had been told, I wouldn’t have understood. My father handled the whole situation badly. He wanted to give me money, enough to live on comfortably, but he did not truly want to give it to me. That is what an irrevocable trust is: money with ropes attached—not just strings. Once I finally understood what had been done, I was shocked and dismayed. It took me years to find a “way out.”

Joe Reilly: If you were to set up a trust for children today, how would you arrange it?

Barbara Blouin: I would create revocable trusts for children. Unless there is only one child, I strongly believe that the trusts be equal. Giving one child more money (as in my own experience: my father gave my brother twice as much as he gave to me) and more control than another is a recipe for creating bad feelings—resentment against the donor, resentment against the sibling with more money and/or more autonomy. I also think a revocable trust should not last too long; it robs your children of their autonomy. It isn’t possible to predict at what age our children will be ready to handle an inheritance on their own, but in my experience from interviews, I think the trust should be dissolved by age 35. Age 30 is another option.

Joe Reilly:  You wrote a book about children in the 50’s raised by servants and nannies while the parents were off living their lives.   We now have a similar situation, but with wealthy parents who both have careers and very high expectations for their children, yet they are not around either.  Do you think they will have similar issues?

Barbara Blouin: To be blunt about it, there is no substitute for good parenting. Any parent who thinks they can have a full-time career and give enough time and love to their children is fooling themselves. This is a hard truth to accept. Of all the interviews I did, the interviews with nannies and children who had been raised by nannies (or other caregivers, like housekeepers) were the most powerful experience for me, and the most heart wrenching. Children who have loving caregivers bond strongly to them, especially so when their own parents are often away, or even out all day. They come to feel, in their heart, that the caregiver is their “real” mother. What happens is that when the caregiver leaves (usually fired by the mother, who comes to notice that her child loves her caregiver more than herself) the children grieve deeply but are unable to express their feelings because of the mother’s jealousy. The combination of leaving most of the childcare to a paid caregiver and having high expectations for their children is the worst of all possible combinations. If parents want their children to be happy, to feel loved, to grow into confident, capable adults, then at least one of a child’s parents has to be prepared and willing to scale down their own career for the sake of the child.

Joe Reilly: How important is work for those with inherited wealth?

Barbara Blouin: I believe that work is the most important activity for inheritors. Not working robs heirs of a sense of purpose, lowers their self-esteem, and leaves them leading aimless lives, always looking for something that they won’t be able to find.

Paid work is not necessary; volunteer work can be very satisfying. Volunteers can make a big contribution to their world, and volunteering helps them develop healthy self-respect.

Joe Reilly: What has stayed with you the longest from your interviews?

Barbara Blouin: Virtually everyone I interviewed was looking for meaning, or purpose, in their life. A sense of purpose is essential. And so is meaning. They go together. Some inheritors, however, did not manage to find a sense of meaning. This was usually related with the way they were parented.

Besides the search for meaning and purpose, most heirs feel like they are different from their peers. I quote one saying “I’m different from others, and I don’t know how to deal with that feeling. It’s scary.” Many of them are embarrassed, or even ashamed. A few go so far as to lie in order to cover up the fact that they are not living on money they have earned. There is good cause for these feelings of being separate: they are different from others. Other people often make snide, even nasty, comments inspired by envy. I have had this experience several times. As for finding ways to “come out” about their wealth, heirs need to take risks. I think the best way for heirs to feel less threatened by revealing their wealth is to become members of a philanthropic organization of heirs. It can be a powerful and empowering experience.