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Inheritance is still as emotional as ever and requires objective advice.

A constant between the generations is that, irrespective of age, family members will to varying degrees remain emotionally attached to their - or their family’s - wealth.

Inheritance is still as emotional as ever and requires objective advice
Glenn Baker

by
Glenn Baker

11.04.2019

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This emotional attachment needs to be fully understood by private client practitioners, because a family’s emotional attachment is not always objective enough to avert dangers nor to structure guardianship of wealth in a muscular enough way to ensure longevity of assets.

By Glenn Baker, Business Development Director, Charles Stanley

It might sometimes be easy to side-line the significance of emotions for private client families when thinking about professional advice, or when focusing on investing and the growing use of technology in that process.  Of course managing a family’s estate or investing their assets should not be an emotional exercise in itself – that’s exactly the purpose of professional advice.  But understanding that all members of a family will live in an emotional landscape unique to them is of vital importance to families themselves and to their advisers.

It is now understood that emotions are a source of deep awareness and understanding in our lives, and both wealthy families and their advisers must be prepared to grapple with the messy material of grief and love, anger and fear.  These are not alien forces but highly discriminating responses to what is of value and importance.

Emotional lives surround wealth

The emotional lives of new inheritors then (be they Millennials or otherwise) has been a subject of wide interest among academics and psychologists, and remains a moot point.

On the one hand, different generations may experience their social anxieties in different ways.  For example, the under-25s as a social cohort tend to drink significantly less alcohol but have significantly increased social anxieties about their body image and social ‘acceptance’ than experienced by previous generations. Older generations have of course lived with other anxieties, ranging from possibly living through a world war, or the perceived threat of a nuclear war, to the social anxieties generated by raising inflation and high interest rates.

But on the other hand, I think we need to be very careful of cultural stereotyping, such as those stereotypes that depict all Millennials for instance as miserable, unhappy, unfulfilled, too busy to ‘feel’, or having trouble being emotionally vulnerable and therefore unable to love! This is obviously simplistic in the extreme. Different social cohorts may have different avoidance strategies, or may struggle to express emotions (true for someone in 1919 after all as it might be for a Millennial in 2019), but all generations have emotional lives, and this is certainly true in regard to inheritance.

Indeed, this and other sensitive paradoxes should be understood by all of us. Another paradox is that the emotional lives of the new inheritors crave human contact, despite what cultural stereotypes might suggest (that Millennials are the most disconnected generation socially even if they are the most connected generation technologically). In other words, Millennials may (or may not) believe that everything can be self-taught in the tech age without the need for other human input, but at the same time ‘real’ human contact and meaningful connectedness is deeply craved by this generation - as with any generation.

Such paradoxes do become more embedded. Millennials have fed the explosion in digital robo-advisory tools, such drag-and-drop investment sites that resemble video game interfaces. But these don't offer human advice. Technology may provide platforms and help to control costs, but only human advisers can appropriately react to changing life circumstances. A robo-adviser isn't going to respond, for instance, to job uncertainty or an illness in a family – or provide a sounding board and objective advice about major life events.

Family histories shape the present and future

As with previous generations then, we are still influenced by those from whom we will inherit, they inform our decisions - whether we follow in their footsteps or markedly move away from - and reject - their approaches.  Either way, we will have an emotional response. Our emotional past, in which our parents feature, is an influence that needs to be understood appropriately.

Adult human emotions cannot be understood without understanding their history in infancy and childhood, and within the wider context of a family. It would not be possible to have an adequate understanding of grief (following the passing of one’s parents) without grasping it as one strand in a history of deep love, or of longing for protection and comfort.  The grief itself bears the traces of that entire history, which lurk in the background, to give it its specific content.  Indeed, one’s emotions towards new loves, angers and fears are also often emotions toward one’s own past.

Thus the power and urgency of emotions, the sense that one is passive or powerless before them, or, by contrast, motivated by them to act quickly and ‘take control’ in what is perceived to be the best possible way. For example, the Roman philosopher and dramatist Seneca the Younger, himself an adviser to the next generation of Roman emperors, whose thought and plays have had a major influence on Western thought and literature, is fond of comparing emotions to fire, to the currents of the sea, to fierce gales, to intruding forces that hurl the self about, cause it to explode, cut it up, tear it limb from limb.[1]  Such images are of course found in many cultural traditions, in poetry from India and China, in the African novel, and elsewhere.  The point is that emotions are natural energies, they colour the room one is actually in with the intense images of other objects of love or fear, of other stories and shared histories. 

For example, childhood feelings about one’s parents enable a person to understand the needs and wishes of an adult love.  Childhood confidence in the reciprocating love of their parents enables her or him to love an adult partner without suspicion.  Emotions shape the landscape of our mental and social lives.

Conclusion

The sensitivities around inheritance are deeply rooted and are not always immediately obvious.  Families can use their collective emotions to navigate the process of inheritance, but with its own collective history and characteristics this is unlikely to be as objective as we may like to believe.  Little or no professional advice on the transfer of intergenerational wealth could result in subjective and emotional choices on the part of the inheritors.  After all, such a transfer is an emotionally loaded act.  Consider for instance that it cannot surely be a ‘relief’ to find financial security only upon the death of one’s parents.   

Every family's situation is unique. Some families educate children early on to better inform and prepare them for the responsibilities of wealth. Others feel that they must protect their young and don't disclose much information to their children. There is no single solution, but preparedness is essential in case of any significant life-changing events.

 


[1] See, for example, Seneca the Younger, Medea, Phaedra, Oedipus, Agamemnon, Moral Epistles.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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