Ask Amy: Teaching kids about family wealth

DEAR AMY: My husband and I have been happily married for 25 years. We have two sons in college. We are in the fortunate position of being completely financially secure. We have a nice home in a great neighborhood. We have a great life and support causes important to us. We're not ostentatious, but we are very wealthy. How and when do we let our sons in on the secret that they're wealthy? They're in college and have no idea of the wealth they already have - and what they will inherit. We pay their tuition, car payments and phone bills and give them a modest allowance. We have encouraged our sons to take classes in finance as part of their education and want for them to become responsible adults and to find fulfilling work, but they will never have to work. We are considering informing our sons of their wealth gradually and are taking steps to ensure they don't come into huge sums of money suddenly. We have all seen wealth ruin people - especially young people. Any words of wisdom on this?

--Stealth Wealth

DEAR STEALTH: Talking about wealth is like talking about sex; this should not be one conversation but part of an ongoing education.

I have one quibble. Your sons will have to work. You could further your sons' financial literacy by giving them less - not more - money now.

Tell them that next semester they will have to earn money for their books and spending money at school. See what they do to earn and preserve their own wealth.

It is up to you how specific to get when discussing your estate planning with them, but I agree with your choice to do this gradually.

Your question prompted me to pick up the book "Rich Dad Poor Dad: What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not!" by Robert T. Kiyosaki (1997, Business Plus). You and your kids should read it.