Excerpted From: Inc. Magazine, Aug 1989 | By: Ellen Wojahn

When it comes to passing on the wealth, every so-called expert has an opinion. Why hasn't anyone asked the kids? Let's find out what it's like being the child of a wealthy company owner. Are these kids different from other rich kids? What do they feel about their inheritances? Their parents? And what about their parents' concerns? By giving too much too soon, are they depriving their kids of the chance to make their own way in the world? Of the opportunity to follow in their footsteps? Maybe we'll find that money isn't the issue. -- E. W.

What Roger and Sybil Ferguson want for their five children is what most entrepreneurial parents want for their kids: a challenging yet fulfilling life, with at least a taste of the satisfaction they've known in building something from the ground up. But they can't help but think they failed their children and threatened that dream four years ago, when the Rexburg, Idaho, pair -- founders of Diet Center Inc., the international chain of weight-loss centers -- decided to use the proceeds of a private placement and a public offering to establish multimillion-dollar trusts for each of their kids. At the time the move made them feel generous. (It also reduced the company's taxes and provided expansion cash that otherwise would have had to have been borrowed.)

"There's no doubt it was great for the company, but the kids, well, you look back and you think maybe you ought to have done things differently," says Roger Ferguson.

Not that the Fergusons didn't raise good kids; they did. Some are more gainfully employed than others, and some are more grateful for the inheritance than others, but "they're fine citizens, all five of them," Roger says.

Still, he broods, "Sybil and I just wonder if they're really happy having gotten all this money before the age of 30 . . ."

"Whether they'll ever know the thrill of achievement we had," Sybil interjects, "in watching our dreams come true."

"And whether they know what it takes to survive," Roger emphasizes.

"Maybe they'll never need to find out," Sybil points out.

"Maybe not," Roger agrees. "But you've got to wonder if our kids could maintain this lifestyle -- or even make a living -- if the money quit coming.

"We think we might have been better off giving a little less and waiting a little longer," he adds. "Some of our kids were barely 21 at the time, and it might have been wiser to wait till age 30 or 35." Like other entrepreneurial parents, the Fergusons have also wondered whether it might have been wisest to simply take the kids off the dole and watch them make their own way in the world.

"Too often inheritors get the power before they've got the smarts to use it," says Stevenson, the Minneapolis inheritor and career consultant. He recalls being a 21-year-old millionaire who suddenly felt his career concerns were irrelevant. "In this culture the main standard for success is how much money you make, so at the time I thought if I already had what seemed to be all the money in the world, why should I start at the bottom and work my way up the ranks? I was already making more off my trust fund per year than I could in the first few years of a career." Had he been older, he might have had a ready benchmark for success to substitute for the money that had dropped into his pocket. As things stood, he struggled for a while until finally deciding to start his own business.

Stevenson didn't know ahead of time that he was going to inherit the money, which, he says, allowed him to lead a normal life. But most experts think there is a point at which children should know their parents' intentions. "I know of plenty of kids who turned 35, even 45, and still couldn't get an answer," says psychologist Barber. "They had been responsibly supporting themselves for years, but when they needed to know what to expect so they could do their own financial planning, the response was 'Don't worry, you'll have enough money.' "

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No matter how much their childhood affluence would seem to have prepared them for it, most inheritors say actually accepting the check with all the zeros changed their lives. Wade Ferguson, the number-two son of Roger and Sybil, speaks of his inheritance quite rapturously.

"All of a sudden I could buy what I wanted, spend all kinds of money, and not worry," Wade says, delighted by the memory. "My wife and I went to town pretty good, and sure, we blew the interest for the first year or two." They traveled the world, they bought a Mercedes, and they showered relatives and friends with gifts. If Wade's parents disapproved, he certainly didn't know anything about it. "I remember their saying they wanted us to have a good time."

By all accounts, spending sprees are common among new inheritors. They are so common, in fact, that most experts say parents should quit worrying about them and start accepting them as part of the experience -- "so long as there isn't some deeper emotional need spurring it on," says Tracy Geary, cofounder of the San Francisco Women's Foundation, which offers a program for women inheritors. Rather than evidence of moral turpitude, a fling may simply mean the child has grown up with enough self-confidence to express himself or herself, and experiment with lifestyles.

It is at least as common, although probably not as psychologically healthy, to see new inheritors immobilized. Sometimes it stems from feelings of guilt attached to their newfound wealth; other times it's simply the result of discovering that their inheritance has removed one of the biggest motivations anybody has for doing anything: making money. Either way, it's a painful experience.

http://www.inc.com/magazine/19890801/5753.html