Should I tell my children about their inheritance?

The alternative is to both write a will and create a family trust in which you define the long term management of your assets. Illustration/Joseph Barasa 

Posted  Tuesday, November 5  2013 at  17:12

In Summary

• It is unlikely that my response to you today will satisfy all the interested parties, and it is my view that different sets of circumstances will require very specific and different solutions. No single formula will fit all cases.

I am a businessman in Nakuru town with a fairly large asset portfolio and I love doing things in an orderly manner. I have a few children to whom I want to entitle some of my property to avoid any future wrangles. I am, however, in a dilemma over the right time and manner to distribute the wealth.

An advisor told me that letting the children know their portion of the wealth at an early stage may ruin their future because they would stop working hard. Please help.

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In the last year or two, a number of prominent Kenyan businessmen have passed on and left variable degrees of order (in some cases chaos) in the affairs of their estates.

Your question therefore is topical and is the subject of ongoing debate, in social gatherings, in business circles, and also in courts of law.

It is unlikely that my response to you today will satisfy all the interested parties, and it is my view that different sets of circumstances will require very specific and different solutions. No single formula will fit all cases.

The parable of the prodigal son is a logical place to start. In the Holy Bible, Luke 15: 11-32, the story is told of the young man (like your son perhaps) who went to his father and asked for his inheritance.

For whatever reason, his father gave it to him, and within a few years he had wasted it all on prostitutes (among others) and he was eating with the pigs that he was looking after.

When sense (or guilt) prevailed, he went back to his father who declared that his son had died, and now was alive, was lost and had now been found.

His older brother was angry because by receiving him back to the fold, his father did not seem to place any significance to the long-term loyalty and dedication he had showed.

In a sense, you find yourself in a dilemma just like the old man, because letting them know too early what they will get could change the course of their lives and make them live a life of waste.

Just to complicate your life a little, Mathew 25: 14-30 is about the master who gave talents to three of his servants (perhaps as you could with your children).

In time, each of them comes out in their true personalities. One of them proved to be a risk taker who prospered in business while the other was clearly risk averse and hid the talent in the ground. He took no risk and did not multiply the talent.

Upon his return, the master was full of praise for the businessmen who invested well, and punished the risk averse individual. Even the little the poor chap hid in a safe place was taken away from him.

Though many interpretations of this story are possible, one of them is about the fact that different human beings behave in different ways, in the face of similar circumstances. Some will take risks, others will not.