UNEQUAL TREATMENT REGARDING MONEY:
Parents may elect to favor one child over another (sometimes unconsciously), but if they do, they need to be ready to deal with the consequences of their actions. One of the best ways to ensure that children become bitter and resentful towards one another is to treat them unequally, especially with regards to gifts of money.
When Mom and Dad don’t treat their offspring equally, it can lead to jealousy, bitterness and relational breakdown among the kids. Parents often mistakenly label these problems as sibling rivalry. Unwittingly, they may have had a hand in creating these problems for their kids. If undetected, these feelings may lurk underground for years before erupting explosively, sometimes after Mom and Dad have passed away.
INEQUALITY BETWEEN BROTHERS:
I loved my dad deeply. However, I think he could have potentially used some advice in this area. He was always generous to us, as his children, but we sometimes felt he wasn’t as fair as he might have been. For example, my brother Chuck studied long and hard for seven years to complete both a Bachelor of Arts, and a Bachelor of Architecture. When he graduated, dad rewarded him with a brand new Austin Healey 3000. It was a metallic blue convertible, complete with chrome spoke wheels. When I was just in grade 10, my dad gave me my first car. That was nine years earlier than when my older brother got his first set of wheels!
I never heard Chuck complain about this situation, but I believe that this stark contrast in treatment must have contributed to his feelings that Dad may have loved me more.
In our family, my siblings and I eventually concluded that, in spite of our dad’s best intentions, there were enough inequities in how he treated us, to make us realize that this warranted further consideration. So the four of us agreed to a financial review of the past to determine what had actually occurred. Surprisingly, the analysis showed that there had, in fact, been significant inequalities. Furthermore, any fair-minded person would probably conclude, as we did, that there should be some retroactive adjustments. To make these adjustments, we did a number of things. However, for me personally, it meant going to the bank, taking out a new mortgage on our home, and distributing the cash to my siblings (to pay back the “extra” I had received from our dad.)
WISE FAMILIES CORRECT INEQUALITIES:
Years later, I worked with another family whose circumstances were similar to ours. In their situation, the eldest had received substantially more than his younger siblings. As a result of discussing this together, he voluntarily offered to pay the extra amount into a fund that would be divided amongst the other family members, in order to achieve equality (similar to what I had done). I will never forget his words at the end of our meeting as he thanked his siblings for giving him the “opportunity” to pay the money back. He stated, “Knowing that I had received more than the rest of you has been bothering me for a long time. Thank you for allowing me to clear my conscience… and to pay back the extra that was given to me by our dad”.
In this situation, and in any family with wealth, he got what we all should want. That is, the opportunity to build relationships with each of his siblings without letting money get in the way!
DISCUSSING THE UNDISCUSSABLE:
BEING FAIR WITH MONEY: My wife, Alison, and I wanted to make sure that the choices we made, when gifting money to our kids, would not drive a wedge between any of them. Consequently, we have worked diligently to treat our children equally in regards to love and money. However, equal is not always fair, and this was certainly the case when it came to their sporting activities! Permit me to explain:
When our daughter Christy started to play soccer, we happily bought her new cleats and shin pads. But, as she entered her teens, I remember being shocked that her new goalie gloves cost over $100 per pair. These concerns vanished when our son Jon started playing hockey. Skates and hockey equipment were a lot more expensive. Soon we were buying $300 aluminum, hockey sticks, as well as an extra one—just in case the “unbreakable” stick did break.
When our youngest child, Stephanie, took up horseback riding, even hockey started to look cheap. She started riding at age three, and she won her first competition when she was just four. Lessons became more frequent; then came the purchase of her first horse, and then her second. One new saddle added up to all we had spent over the years on hockey and soccer combined. Certainly, this wasn’t equal.
OUR PROMISE TO PAY WASN’T WORKING: I began to wonder if our “promise” to pay for all our kids’ sports equipment was still a good idea. One day, I asked my wife, Alison, if it would still be fair to pay for Stephanie’s riding if it became a $1 million annual expense. She agreed that if the costs became extreme, this would no longer be fair.
The next year, riding-related expenses skyrocketed. In addition to the normal expenses for horse shows, lessons and tack, we also had to pay for major surgery and other related veterinary bills.
WE ASKED THE KIDS FOR INPUT: So, we called a family meeting to discuss sports equipment, horses and fairness.
We proposed that, in the future, any costs over an agreed upon amount, should be Stephanie’s responsibility. In essence, we would put a cap on how much we were prepared to pay for our daughter’s riding each year. All the kids agreed that this made sense.
Happily, Stephanie was able to continue riding for several more years, but her “extra expenses” were deducted from funds she might otherwise have received. IT WASN’T EASY TO TALK ABOUT, but our kids showed maturity and flexibility in reaching a conclusion that not only respected everyone’s differences, but a conclusion that we all felt was fair. What about your family? DO YOU HAVE THE COURAGE TO TALK ABOUT THE UNDISCUSSABLE?
FAIRNESS MEANS TREATING EVERYONE DIFFERENTLY: Dennis W. Bakke, in his best-selling book, “Joy at Work”, states that “fairness means treating everyone differently.”(*) I agree. In many situations, fairness is not equality. Unfortunately, I have heard many parents say “fair doesn’t mean equal” simply as a way of justifying their decisions. These words can be used as a smokescreen to divert attention away from inequities, or as an excuse for not doing the hard work of treating children fairly.
Let’s explore an example. A family I know owned a second generation business in a remote island location, and they were planning to hold the annual shareholders’ meeting there. One of the five shareholders lived onsite; one lived about an hour’s drive away. Two others lived five hours away and could access the island by ferry. The fifth shareholder was a teacher who lived in the Middle East. We discussed providing cost reimbursements for everyone to attend the meeting. Estimated costs for the group members were $0, $40, $200 and $5,000 respectively. Clearly, paying everyone $1,000, an equal amount, would not be fair. This would be a windfall for several, and a hardship for the sibling who had the farthest to travel. On the other hand, it might be fair to pay each person’s out of pocket expenses to attend the meeting, but this would certainly not be equal.
This family decided to NOT pay everyone equally. However, they were also not comfortable paying thousands of dollars to fund one member of the family flying half way around the world, just to attend a meeting. In the end, they agreed that this would not be fair (especially if they had meetings every year).
So, in an effort to be both fair, and prudent, they eventually agreed to pay everyone’s travel costs, to attend regular shareholders meetings, BUT NOT EVERY YEAR. Instead, they agreed to pay for travel costs every 2-3 years for their sibling in the Middle East, and in the intervening years he would participate by Skype. This was NOT FAIR, NOR WAS IT EQUAL, but it made sense.
How did they come up with this plan? They talked about it. They explored alternatives, and had the courage to abandon “fair” and “equal” Instead they opted for “workable in the circumstances”. Fair and Equal are powerful words, behind which are often powerful emotions. Sadly, in the effort to be fair, or equal, many families have been destroyed. Sometimes, they just need to have the wisdom to choose a fresh new approach which, after weighing all the pros and cons, can be seen by everyone as “acceptable for the situation”.
The key is to talk it through.
(*) Dennis W. Bakke, “Joy at Work: A Revolutionary Approach to Fun on the Job.” (PVG) – 2006
The above article is an adapted excerpt from David C Bentall’s book: “Leaving a Legacy – Navigating Family Business Succession.“ To order a copy, personally signed by the author, please email David at email@example.com