1. Family Relationships and Wealth DC Finance – Tel Aviv June 10, 2014 Joanie Bronfman, Ph.D.

2. Couples and Wealth All couples have to deal with money issues Wealth adds another level of complexity such as the dynamics of a large multigenerational family

3. Financial Issues for Couples to Talk About What lifestyle do they want to live? How will they integrate the financial perspectives they each bring to the marriage? How are they going to handle money? How are they going to deal with money with their children?

4. People Who Marry into Money May Feel Like Immigrants They may feel uneasy with how the wealthy family uses money They may fear that wealth will damage their children They may feel uncomfortable if their children have access to money and they don’t They may have a difficult time dealing with money with their children and their partner

5. When the Woman Has More Money What I think makes a difference is: Basic regard for each other Self-esteem Ability to discuss issues Understanding of their own and their family of origin’s experience with money

6. Talking about Money Talking about money is often challenging for many people Wealthy parents who don’t talk about money with their children make it harder for the next generation to deal with wealth Understanding their and their partner’s financial history is useful for couples

7. Common Questions for a Couple to Talk About What were each of their parents’ financial situations when the parents were children? What were their parents’ attitudes about money? What were their parents taught about money and money management?

8. Common Questions for a Couple to Talk About What were their parents’ attitudes about spending, saving and tzedakah? How have their parents’ attitudes about money influenced them?

9. Talking with Children about Money Why parents make the financial decisions they do What money means to them Issues they have had with money How they have dealt with those issues

10. Helping Children Learn about Money Parents can give their children: Money to spend Money to save and invest Money for Tzedakah

11. Helping Children Learn about Spending Allowances provide opportunities to learn about spending A child’s desire to have certain possessions can be a part of their developing a sense of self If children’s desire conflicts with parents’ values have a values discussion

12. Helping Children Learn about Spending If children want something that costs more than they have: Suggest ways they can earn the money Consider matching what they earn Have budget discussions Talk with your children about why you make the spending decisions you do

13. Helping Children Learn about Saving From piggy bank to personal bank account to investments

14. Helping Children Learn about Investing Give children a stock that they can follow Help children develop a watch list portfolio Establish a family investment club

15. Preparing the Next Generation Adequate preparation is one of the challenges of dealing with wealth Families that don’t talk about money often don’t prepare their children to deal with the wealth Giving young adults small amounts of money can provide them with opportunities to learn about dealing with the wealth

16. Philanthropy, Charity Tzedakah Include money for charity when giving a child an allowance Help the child find an organization to support Consider a joint family philanthropic project As children grow up they should be included in the family fund/foundation as observers, advisors or members of a junior board

17. Recent Study Found that Young Adults Were seeking a balance between honoring the family legacy and assessing the needs and tools of the day Some were dissatisfied about their involvement in family philanthropy As one donor said, “Everything that is done is on behalf of us and the family but we don’t have a voice…”

18. Young Adults and Philanthropy Young adults may have different philanthropic perspectives, interests and skills They often have more computer and technical skills that the older generation These skills are useful to the family

19. Conclusions Wealth can provide wonderful opportunities and difficult challenges But the challenges can be met

20. Conclusions: Meeting the Challenges Couples can learn about why they have different attitudes about money They can teach their children basic financial skills and They can help them to develop philanthropic interests Families can benefit from the skills and interests of the next generation

21. Conclusions However, many of the challenges in wealthy families, like all other families are emotional Families that have not dealt with their emotional issues tend to pass on not only the wealth but also their emotional issues