We have seen a marked increase in the number of clients helping either parents or children financially. This trend has led us to include a key question in our initial conversations with clients: “Who else is dependent on this money?”
There are many reasons for this increase in financial support within families. It seems increasingly difficult for young people to establish a solid financial footing. It’s not that they are lazy or indifferent to money - statistics point to a sharp rise in the cost of living in major urban centres around the world. This has, for example, pushed young people out of the property market.
In South Africa, specific socio-economic issues may play a role. For instance, the emergence of the first generation of post-Apartheid wealth has, in some cases, led to better-off siblings supporting their parents and broader family to survive – the so-called Black Tax.
In addition, generational attitude shifts toward money may have made parents more dependent on their adult children, and young adults more dependent on their parents.
We’ve noticed that wealthy parents are now more inclined than before to help their young adult children financially. We encourage this help, provided that the parents first evaluate the impact on their financial planning. There is little point in delayed inheritance when earlier financial support could offer children the compounding benefits of security and opportunity much sooner.
Whatever the reasons, it is prevalent, and we ignore it at our peril. It’s better to admit to ourselves and our advisers upfront that these dependencies exist. The dependencies could even impact pension payouts and result in claims on deceased estates. Financial support that remains secret, unspoken, or undefined can leave heirs facing unpleasant surprises. If undocumented, financial help can cause a myriad of unintended problems for the family, including a run-in with the taxman.
Financial dependence often has a stigma attached to it. I question the validity of this stigma – it’s a modern, Western, and unrealistic expectation that all family members should always be completely financially independent and secure. Of course, financial help should not excuse irresponsibility or unhealthy dependency - but that’s a different topic altogether.
Another complex issue is fairness. How do family members ensure that help is fair to siblings or that siblings carry an equal or proportional responsibility to help parents? The questions around financial help often expose differences in value systems, both within family members and between them.
Financial help in families is a minefield. I have seen it damage, even destroy, family relationships - but it doesn’t have to.
This is why we want to go further than asking the question at the start. We want to help families discuss the options, consider the implications, and formalise and document these commitments. With thoughtful planning, financial support can be a source of love and grace, rather than a source of stress and division.
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Kind regards,
Sunél
//20 June 2025