The world’s current richest person can teach all of us how to prepare our heirs to inherit, though our estates are going to be substantially less valuable than his.
Parents frequently worry that their children aren’t prepared to inherit the wealth that likely is coming their way. Whether the inheritance is likely to be a few tens of thousands of dollars or a much larger amount, parents fret that it might be wasted, mismanaged, adversely change their children or grandchildren, or the responsibility might be a burden to them.
There are steps you can take to avoid those outcomes.
Bernard Arnault is chief executive officer and chairman of luxury goods retailer LVMH Moet Hennessy Louis Vitton SE. He’s currently ranked as the world’s richest person by Forbes.
For decades, as part of his parental and business duties Arnault systematically prepared his children to run or contribute to the business and to responsibly inherit significant wealth.
Arnault started early. While the children were growing up, he scheduled them to come into his office so he could drill them on math between his meetings.
As the children became adults, he ensured they worked in one of the companies owned by LVMH. He also assigned them to work for other executives he respected and who could serve as mentors.
Arnault still has a monthly lunch with all his children at which he discusses issues he’s facing at the company and asks the children for advice.
Of course, Arnault also has done significant estate planning. His shares of the company now are in entities similar to LLCs of which he and the children are owners. The entities are structured so the shares have to remain in the family for a considerable time after Arnault passes away, according to The Wall Street Journal.
Arnault has been practicing the key elements of successful succession planning.
The children learned about money and business early in life and never stopped learning. They’ve been informed of and actively involved in the family’s businesses and financial affairs. They know the business actions their father is taking and why he’s taking them.
The children also have the opportunity to learn from others, work outside the direct responsibility of their father, and develop their own decision making skills.
Their father’s wealth and estate plan won’t be surprises to them when he passes away. They’ll have had a lot of time to decide what they want to do, learn to work together, and prepare to inherit.