For generations, parents in Hong Kong have hoped that their children would succeed. Having experienced hardship themselves, they may want to spare their children from the same struggles. Yet their boundless patience with children who have never faced such difficulties has not helped those children achieve success on their own.
In recent years, numerous reports have described children squandering their family fortunes within just a few years of inheriting them. Such stories keep emerging, highlighting the unresolved challenge of passing family businesses on to the next generation in Hong Kong.
Many Chinese fathers have long hoped that their children would take over the family business, but this arrangement does not always work. Parents in Hong Kong need to recognize this reality. If their children are not suited to running the business, they should consider setting up a trust and placing the business in the hands of professional managers, rather than just handing it down will secure its future.
What about middle-class parents? A friend of mine runs a small accounting firm that has never done it particularly well. His only son graduated from university three years ago but was unable to find a job. Eventually, my friend created a role for him at the firm. He also paid the down payment on a house so that his son could have a home of his own.
My friend is now getting on in years and plans to retire in two years. His son, however, has shown little sign of becoming more independent. He continues to work at the firm but has made no plans for how he will support himself once his father retires.
With retirement approaching, my friend cannot leave all his assets to his son. His son has never worked anywhere else and will be unemployed when his father retires and closes the firm. At that point, his father will no longer be able to provide him with a livelihood.
