Trust Estate
BOOK REVIEW: Freedom From Wealth By Charles Lowenhaupt

The founder of a wealth advisory business has written a book explaining how those who bestow and inherit wealth can benefit lives.
An earlier version of this review was published in Family Wealth Report; we hope readers in other regions will also find this material of value, given that inheritance questions have much in common. In certain parts of the world, such as in mainland China, where the one-child policy has only recently been relaxed, inheritance creates particular challenges.
History books and glossy magazines are full of stories of how
scions of great business and political dynasties have come
unstuck. The problems take many forms, such as reckless spending,
substance abuse or wrecking physical and mental health. While
parts of the public might gloat, even imagining that there is
some cosmic “justice” in how money does not necessarily buy
happiness, there is a clearly serious question here. And above
all, it should be recognized that inheriting great wealth is not
something for which anyone should be “punished” if that wealth
has been legitimately acquired. What is the point of believing in
honest property rights if you cannot bequeath them to your loved
ones and the causes you hold dear?
Even so, there is obviously a challenge in front of those who
want to pass on their wealth: How can this be done without
causing a number of problems down the line? How to keep an
inheritor’s feet on the ground and ensure they forge their own
values and create their own goods in the world? And how should
inheritors think about this, to avoid traps, whether they be
threats (kidnapping, to take an extreme case) through to
attracting false “friends” who are only interested because he or
she happens to be rich?
A wealth management industry figure who has been thinking about
all this is Charles A Lowenhaupt, founder and CEO of Lowenhaupt
Global Advisors, based in the US. He has penned The Wise
Inheritor’s Guide To Freedom From Wealth – Making Family Wealth
Work For You. The 152-page book has an engagingly non-technical
style, written in a way that simplifies dealing with inheritance,
philanthropy, family communication, fairness, parental
expectations and the mechanics of wealth transfer. (The author of
this review read it in a few hours.) It does so without dumbing
down the subject or becoming at all condescending. Charles
enlivens the book with real-life studies (the names are removed
to protect client privacy), and these really jump out of the
page. There is one example of a family where the patriarch, his
wife and children lived in humble circumstances without any
obvious trappings of great wealth, and one day the children were
told how they stood to inherit a fortune. How Lowenhaupt relates
how they adjusted to this and beat early mistakes is one of the
highlights of the book. (The book has echoes of Philip
Marcovici’s The Destructive Power of Family Wealth.)
Another pleasing aspect of the book is Lowenhaupt’s unashamed
individualism. He exhorts families to never lose sight of how
each person is unique, not just a cipher of a patriarch or
matriarch’s will. To some extent, he says, the use of the word
“family” in all discussions can obscure as much as it
illuminates. (This is refreshing in an age of creeping identity
politics and tribal thinking about many subjects.)
The author is not afraid to confront difficult social issues such
as how inheritors – or indeed non-inheritors – think they have
been wronged. There are some excellent passages on how to manage
families’ expectations, as well as the effectiveness and
flexibility of trusts for passing on assets and managing finances
tax-effectively.
Lowenhaupt goes to great lengths to explain that wealth, when
seen in its proper context, is can be a force for good, but when
not understood and managed carefully, can be a prison. At a time
when some people continue to live in poverty, that might seem a
difficult point to make, but Lowenhaupt does so effectively
without ever sounding trite.
The march of time respects no-one, and preserving wealth across
generations remains a hard thing to do – despite the claims of
academics such as France’s Thomas Piketty, who has claimed that
wealth-holders’ assets outstrip the general growth rate of the
economy as a whole. “From shirtsleeves to shirtsleeves in three
generations” remains all too valid. What can, hopefully, be
easier to protect across the decades, however, are the values
that can and should matter to all generations. Lowenhaupt’s book
is a very effective explanation of how that can be done.
Freedom From Wealth is published by Praeger. ISBN: 976-1-4406-6552-7