Key Takeaways
- “Affluenza” is a term used to describe the extreme bad attitudes and actions—sometimes horrific actions—of some overprivileged children.
- It’s crucial to respond quickly and effectively if a child or grandchild is operating with excessive levels of entitlement and hedonism.
- Various wealth planning strategies can help you better safeguard your assets—and your child’s well-being.
Affluenza. It’s become an all-too-common term used to describe the extreme bad attitudes and actions—sometimes horrific actions—of some overprivileged children of affluent families.
While it’s not an official medical diagnosis, the label accurately fits far too many kids today growing up surrounded by sizable family wealth and privilege.
If you’ve got one or more overprivileged children living under your roof—or if you worry that a child or grandchild may be headed down the affluenza path—it may be time to take action.
Some of the best ways we’ve seen families address the very real problem of overprivileged heirs come from the Super Rich—those people with a net worth of at least $500 million. The good news: There are many ways to fight affluenza—from trying to correct negative behaviors and prevent them from recurring to positioning your assets in ways that don’t add even more fuel to the “affluenza fire.” Here’s a look at a few of the steps the Super Rich have taken.
Defining ‘overprivileged’
“Privilege” has become a politically loaded word in recent years, so it makes sense to first get a handle on what it means to be overprivileged. Different families will likely define this term in various ways, but generally we see that overprivileged children of the affluent tend to act recklessly without considering the consequences. Often this leads to them hurting themselves and their families because of serious problems such as addiction or violence.
In other cases, their actions ruin the lives of many—such as when one affluent Texas teen killed four people in a well-publicized drunk-driving accident. Such scenarios clearly go beyond the plain-vanilla levels of entitlement that exist in many families.
We’re seeing a growing number of these children in recent years, driven in large part by the burgeoning number of extremely wealthy families. Assuming the same percentage of children of the wealthy act out and there are considerably more such families, it’s reasonable to predict there will be a significant rise in the number of overprivileged children.
Some of these kids’ actions appear on social media. But most overprivileged children are living out of the limelight—where they indulge to excess. They regularly are in conflict with the law, requiring their families to come to their rescue in one form or another. Not surprisingly, they tend to be in their teens and 20s. When they are over the age of 30, they might lose the label of overprivileged “children”—even though their actions and attitudes remain the same as always.
There are some key demographic traits often seen among today’s overprivileged children:
- They are the second generation or later scions of extremely wealthy families throughout the world.
- Given a choice between hedonism and hard work, they consistently choose hedonism. In fact, many of them are seemingly striving to continually raise the bar on self-indulgent, pleasure-seeking behavior.
- They have an extreme sense of entitlement.
- Many are narcissistic and tend to look down on those with less wealth.
- They don’t believe society’s laws apply to them in the same way they apply to other people. One common reason: These kids have been in difficult, high-consequence legal situations from which their families have “saved” them.
QUIZ
Is Your Child Overprivileged?
To get a sense of whether your child may be overprivileged, answer this series of questions.
Round 1 questions
- When your child wants to buy the latest and most expensive tech gadgets, do you ever say no?
- Would you have a problem if your child took a year off from college to tour the world in style?
- If your child wanted a high-end sports car for their 18th birthday, would you give them any real pushback on that request?
If you answered “no” to any of these questions, it’s extremely likely that your child is privileged—that is, they have certain advantages due to the considerable wealth of your family. Your child is in a position to do things, buy things and live a lifestyle with limited concern for cost.
That doesn’t mean your child is overprivileged, however.
Round 2 questions
- Does your child consider themself to be better than most other people because of your family’s social and financial standing?
- Does your child need to and ever intend to work for money or for the good of others?
- Does most everything revolve around your child and their being intent on having a good
time?
If your answers to these three questions are (respectively) yes, no and yes, your child might be something of a hedonist—and possibly not very nice to be around. That said, they may not necessarily be overprivileged.
Round 3 questions
- Do your child’s actions cause significant problems for them, you and other family members, or other people (or all three)?
- When your child does cause severe problems, do you always come to the rescue?
If you answered yes to both questions, it’s time to stop and reflect. If your family is wealthy and your child is selfishly hedonistic and your child acts in ways that hurt your life and the lives of your loved ones (and even strangers) and you swoop in to save your child from the consequences of their bad actions, your child is very likely overprivileged.
Addressing problems caused by overprivileged children
Often, parents find themselves reacting to problems created by an overprivileged child. Effectively dealing with those issues is often broadly conceptualized by behavioral professionals as a three-step process (see Exhibit 3):
Step 1: Manage the crisis
Immediate issues need to be addressed—especially if they present dangers to a child or others. For example, if the child was arrested, lawyers are required to arrange for bail or some other speedy solution. A public relations expert might even be required in extreme cases. If there is a way to readily address damages, that approach must be identified and evaluated.
Step 2(a): Manage the situation problem
This is an extension of the previous step. The situation has been somewhat defused and action is being taken to mitigate and fix the problems created by the overprivileged child. Often an expanded team of specialists is required. At the end of this step, the result is some form of resolution to the problems caused by the overprivileged child.
Step 2(b): Manage the child problem
Next, the family takes action to get their overprivileged child help, if needed. Some corrective action should also be taken so the situation does not repeat itself. For example, in the case of drug addiction, the child goes to a rehabilitation center. Sometimes, the family is able to adjust the financials—making it difficult or impossible for the overprivileged child to access funds when being destructive and harmful.
Step 3: Move from overprivileged child to responsible adult
A longer-term strategy should also be created and implemented to help overprivileged children become stable, well-functioning, capable adults. This is not to say that they will never again make mistakes. The aim is to help them avoid repeating the actions that caused them and their families significant problems. Part of the solution may be to control their access to family money until they are able to make financial (and other) decisions maturely.
Dealing with the problems caused by over privileged children and pursuing ways to help them can be a complex, lengthy process. Various experts can be needed throughout the effort, and we see an expanding set of professionals these days who are focused on helping wealthy families deal with problems when they arise. These professionals include traditional resources—such as psychiatrists, psychologists and clinical social workers—as well as new family consultants, family business consultants and life coaches.
Wealth management aspects
All that said, families should also be thinking proactively when it comes to identifying and short-circuiting affluenza and its potential impact. That means wealthy families with overprivileged children need to make careful plans for their assets. Think about it: Leaving money to a child who suffers from a terrible drug addiction could be their death sentence.
From estate planning to asset protection planning, it is wise to understand the issues involved and work to mitigate the ability of overprivileged kids to cause problems because of easy access to money.
There are a variety of wealth planning strategies that can be used to insulate the family and mitigate the impact of bad behavior. One example: Using trusts that have built-in oversightof an overprivileged child’s inheritance is a common and relatively easy way to protect the child and other people. Such trusts might also help protect assets from creditors and others. (Of course, the best way to use a trust will depend on the particular situation.)
In certain instances, the wealth planning becomes more specialized. When there is both a family business and overprivileged children, for example, succession concerns and family wealth equalization can be contentious topics. Families often need to think through the various approaches and become comfortable with the probable outcomes.
Warning: When it comes to expert wealth planning and over privileged children, it’s not the actual wealth strategies and techniques that are most important. The most critical aspect to achieving the desired (and necessary) results is truly understanding what the expectations are and effectively identifying possible action steps required in order to meet them.
That means if you work with a wealth management professional, they should be adept at uncovering your specific needs and goals and bringing the appropriate solutions to the table (either by themselves or via their relationships with expert specialists) and explaining the pros and cons of each approach.
Conclusion
Should you be panicked that your children or grandchildren may have a serious affluenza problem? Probably not, in most instances. But let’s face it: If you have significant assets, it makes sense to be on the lookout for indications of affluenza among your heirs—as well as take some time to examine your own behaviors and the messages you put out there about wealth, influence and values. By communicating together as a family, you can potentially set your children up to have a healthy, positive relationship with money throughout their lives.
0 Comments