Growing up wealthy does not necessarily mean growing up money savvy. Psychologist James Grubman told the Reuters Wealth Summit that the children of the wealthy may not have grown up with budgets and financial constraints, and may not know how to spend responsibly.
Sometimes trustees–the people that administer trust funds for children of the wealthy–have to step in and give a dose of tough love. Gail Cohen, head of global wealth management at Fiduciary Trust Co. International, said that if a client has spent too much on their credit card, and risks bankruptcy if they don’t get cash, their trustee will not bail them out. Instead, the trustee will put the client into credit counseling.
