My husband and I have only one son who has refused to do anything serious with his life, because he assumes all of our wealth will come to him and there is no need for him to work.
Although we intend for him to inherit all that we have, I want him to learn responsibility before we hand over our group of companies to him. I would like for him to come into his inheritance only after he has successfully proven his responsibility, perhaps after having held employment with a proper organisation for a minimum of five years.
Is there a provision in a trust to ensure this happens whether or not we are alive to enforce it?
Thanks for reaching out. Your situation is not peculiar. It is very common for children born into affluent families to grow up with an entitlement mindset. This often affects their drive and leaves them completely unambitious and reliant on the family wealth.
While it is important that we provide for our children and give them a good quality of life as much as we can afford, it is also essential that we teach them from the cradle the value of hard work and independence. We must remind them that everything they enjoy is a result of our commitment to work and that they must strive to create a life for themselves also. They should see their parents’ wealth as a good foundation, or a stepping stone, a pedestal on which they can build their own legacies, win their own laurels and claim their own victories. However, some children refuse to learn diligence regardless of the parents’ efforts.
You are thinking in the right direction. Setting up a Trust is a very effective way to preserve your wealth for your son while attempting to reengineer his attitude to work. Regarding the possibility of withholding his inheritance till he has proven his responsibility, yes, this is possible. Such exigencies can be catered to.
You can either create a spendthrift trust or include spendthrift provisions in the Trust, which would restrict your son from directly accessing the funds in the Trust until he acts in a more responsible manner – as may be ascertained by the Trustee. The Trust would hold direct interest in your assets and would only distribute some of the returns of those assets to your son where he meets the standards of responsible living that you may have prescribed. Your assets would therefore be professionally managed and would not be dissipated by your son. Your son would, however, be able to receive benefits from the Trust over time once he is acting responsibly.
Apart from setting up the Trust, you and your spouse can also sit your son down for a long heart to heart discussion. You can lovingly explain to him your dreams and expectations of him while reiterating your confidence in his abilities and willingness to support his ambitions. You can never tell, he could have a career path he is passionate about and eager to pursue.
While it may not particularly be related to the family business, supporting him in his chosen field will give him the leeway to learn responsibility and ultimately prepare him for his family fortune. Who knows? His idea could grow into a lucrative arm of the family’s group of companies.