An increasing number of children from wealthy families are acting “bad.” Sometimes they engage in various forms of immoral and illegal activities ranging from drug use to violence. While some appear on social media sites, most over-privileged children live lives out of the limelight where they indulge in excess, consequently hurting themselves, their families and other people. 

Over-privileged children regularly conflict with the law requiring their families to come to their rescue in one form or another. For the most part, their families do indeed come to “save” them from the harmful situations they created. The majority of over-privileged children are in their teens or twenties, but there are many examples of them who are much older. When they are past their 30s, they are rarely referred to as over-privileged children even though their actions are no different.

Over-privileged children are the second generation or later scions of wealthy families. Between hedonism and hard work, they always choose hedonism. Between hedonism and any work, they always select hedonism. Many of them are seemingly striving to raise the bar on their self-indulgent, pleasure-seeking behavior continually.


Over-privileged children have a strong sense of entitlement. Many are commonly narcissistic and tend to look down on those with less wealth. Because they have been in difficult legal situations from which their families have extricated them, many believe that the laws do not apply to them the same way they apply to other people.


The burgeoning number of wealthy families can best explain the reason for the burgeoning number of over-privileged children. More personal wealth is being created than at any time in history. Suppose the same percentage of children of the wealthy act out, and there are considerably more such families. In that case, there will be a proportional increase in the number of over-privileged children. With the explosion in over-privileged children, an expanding set of professionals are on call to help extremely wealthy families deal with problems when they arise.


A Three-Step Process
Dealing with the problems caused by over-privileged children is often broadly conceptualized as a three-step process:



  • Step 1: Crisis management: Immediate issues need to be addressed. For example, if the child is arrested, lawyers must arrange for bail or some other speedy solution. A public relations expert might be needed. If there is a way to address damages readily, that approach must be identified and evaluated.

  • Step 2A: Situation problem management: This is an extension of the previous step because the situation has been somewhat defused, and action is being taken to mitigate and fix the problems created by the over-privileged children. 

  • Step 2B: Child problem management: The family takes action to help their over-privileged children get help. Some corrective action must be taken to ensure the situation does not repeat itself. 

  • Step 3: From over-privileged child to responsible adult: Often, a longer-term strategy is conceived and implemented to help over-privileged children become stable, well-functioning, capable adults.


The Role Of Wealth Planning
Wealthy families with over-privileged children need to plan accordingly. For example, in some instances, leaving money to them can be an actual death sentence. From estate planning to asset protection planning, it is wise to understand the issues involved and work to mitigate their ability to cause problems because of easy access to money.


“There are a variety of wealth planning strategies that can be used to insulate the family and mitigate the impact of bad behavior,” says Vince Annable, CEO and founder of VFO Advisory Group and co-author of Your High-Performing Virtual Family Office: Maximizing Your Financial and Personal Lives. “Using trusts resulting in oversight of an over-privileged child’s inheritance is a common and relatively easy way to protect them and other people from themselves. Of course, the best way to use trusts will depend on each situation, and trusts in these scenarios usually have asset protection advantages, which should also be considered.”


In certain situations, the nature of wealth planning to help deal with over-privileged children becomes more specialized. “Where there are family businesses and over-privileged children, matters of succession concerns and family wealth equalization can be argumentative topics,” says Annable. “While there are different ways of addressing these issues, families often need to think through the various approaches and become comfortable with the probable outcomes.”


Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.