Eradicating Entitlement - Part One

How advisors can help clients with “trustafarians” among their loved ones

By Randy Fox and Gary Shunk

Key Takeaways:

  • Entitled people, especially children, don’t develop the capacity for self-reliance or independence.
  • Ungrateful inheritors and other “trustafarians” become addicted to the distribution drug and slaves to their family’s wealth.
  • In wealthy families, it’s essential for kids to learn early on about the simple idea of spending, saving and sharing what they have.

Randy Fox: I am privileged to be speaking with Gary Shunk today. Gary is a good friend and also an expert in how families interact with money. Gary’s firm, Family Wealth Dynamics, serves affluent families around the country that are dealing with the nonfinancial issues of wealth. It’s a very broad subject, so today we’re going to narrow our focus to one particular issue—entitlement.

Gary Shunk: Good morning, Randy. Thank you.

RF: Let’s start with a broad definition of what entitlement means and what it looks like. Then we can get into what the effects of it are.

GS: You know, entitlement did not have a negative meaning in the past. If anything, it was about having a right, as in “I’m entitled to certain rights.” Maybe people with legal backgrounds understand this better than I do, because my background is in psychology and family systems (i.e., family dynamics). However, my work focuses on the negative side of entitlement. Oftentimes it’s when families of wealth, in particular the patriarch and matriarch, are concerned about their children’s feeling “entitled” because of their wealth.

RF: What does that mean?

GS: It means the trust fund child, or trustafarian, conjures up a sense of somebody who is an inheritor from a family of multigenerational wealth, in which they basically were born with a silver spoon in their mouth and perhaps were chauffeured to school or were given so many things at an early age that as they matured and got older, they really didn’t develop capacities to be self-reliant or independent.

Entitlement is often created when people seem to be very self-absorbed, pretty much focused on themselves and what they want, as opposed to having a balanced sense of what other people want, what other people need.

RF: That makes sense. So, you’re saying the American dream, as we’ve all imagined it, has some downsides. And so how do parents, not to mention entire families, prevent this when they have wealth and it’s normal for them to do things that everybody else can’t do or doesn’t do or is unable to do?

GS: Let me offer a few examples. But first let me say, to maintain confidentiality and to protect the identity of these family examples, I will be speaking of them by mixing fact and fiction to illustrate my points. That said, [there is] one family I know of in which Mom and Dad, first generation, created pretty significant wealth during their lifetimes. Their children were brought up with the fruits of that hard work. What the parents wanted to do—which any parent wants to do—is to provide their kids with more than their parents provided for them. More experiences. More opportunities. The idea being “We’re so wealthy, we’re so fortunate, let’s pass on some of this good stuff to our kids.”

They’re well intentioned. However, what can happen is that those good intentions can set up a sense of expectation in the children. “When I graduated from high school or before I graduate from high school, I’ll be given a Mercedes,” which is what happened in the case with these two children and the family I’m talking about. These two kids started to act out, which children will inevitably do. One of them actually got in trouble with the law. The family’s wealth allowed them to hire attorneys who could intervene so that the child wouldn’t have to deal with the consequences of his breaking the law. The child was kept out of the whole process, and the parents just took care of it. Subsequently, the boy got in trouble again, and this idea of good intentions got in the way of the consequences—the real consequences of living and growing and ultimately, normal human suffering, which is part of growing up. He didn’t learn from that experience. He got buffered by his family’s desire to protect him.

Protective measures and overindulging can set up inside a child, impairing the maturity of that person.

GS: One of the parallels to entitlement for inheritors is addiction. The Latin root of the word addiction means “is a slave to a master.” When people are addicted to something, say a drug or alcohol, they’re slaves to that master. In the same way, when heirs inherit wealth, then they can become slaves to wealth, meaning that they organize their lives around the money. “When’s the next distribution from the trust going to come?” they ask themselves. They organize their lives around that next hit of the “distribution drug” from the trust. So they end up becoming focused on something outside themselves rather than inside themselves.

RF: Two questions, Gary. How do parents prevent this from happening? The second—if it’s already happened, how is it overcome?

GS: I’ll answer both questions with the term I use, “naming.” When we name something, we’re calling it out. To name something, we don’t want to go direct and hit it in the head with a baseball bat and call it entitlement. Families that succeed and create family harmony, family unity and family cohesiveness over the generations are ones that have conversations about what they have. They discuss the potential risks of what they have and also the potential benefits of what they have. A way I like to think of wealth and money, if it’s really substantial in a family, is that it is actually a member of the family. We are in relationship with this thing that we have—this great wealth.

In a family of wealth, it’s important for the kids to learn early on about this simple idea of spending, saving and sharing what they have, and then working together with family members to decide how they will spend together. How will they save together or invest together? And how will they share or give together philanthropically, charitably?

This can begin as early as 5 or 6 years old. I know of a family in which the father gave a dime to his daughter when she was 7 or 8 years old and he said, “We have a lot of these dimes. And so what I want to do is give you this dime, and we’re going to decide how we’ll spend it, how we’ll save it and how we’ll share it.” That was the beginning of her wealth and money education.

If it’s down the road like one family I described to you, the same idea of naming is important. If the family has never had family meetings before, they may want to begin to have family meetings about their wealth. I often facilitate family meetings around the qualitative or emotional issues that accompany wealthy families.

A three-generation family business had multiple liquidity events over a short amount of time. That was very new to them, and subsequently what they decided to do in addition to getting technical advisors to help them, they also invited me to help them have conversations about what they have and what they want do with it. We held family meetings, conversations among them about what to do with what they had. That process intervenes with a sense of the potential of entitlement or active entitlement by beginning to name what we have and how it affects us.


In Part Two, we’ll discuss ways in which advisors and their clients can take positive steps to remedy situations in which entitlement threatens family dynamics.

About the Authors

Randy Fox is a principal of Two Hawks Consulting, LLC, a national consulting firm dealing in estate and philanthropic planning. Fox also serves as associate editor of The Planned Giving Design Center and he is launching a new training program located at learnplannedgiving.com.

Gary Shunk, principal of Family Wealth Dynamics, consults with families in business, families of wealth and the advisors who serve them on the nonfinancial issues of intergenerational relationship dynamics, communication and trust building.He can be reached at www.familywealthdynamics.com or by emailing gary@familywealthdynamics.com.