I Inherited a windfall - it was a blessing and a curse

Young millionaire heirs are giving away their fortunes to worthy causes, instead of living a life of luxury.

When Paolo Fresia inherited tens of millions of pounds following his mother's death, it was "a blessing and a curse".

At first, he simply acted as though it wasn't happening. Then just 22, "my focus was to run away and pretend that that didn't exist," he says.

"Unfortunately for some other of my relatives who received the money," - hundreds of millions split between them, from the family vermouth company fortune - the windfall "ended up corrupting their lifestyle and also their mental health, so it wasn't good for them, and that money was wasted."

The young and very, very wealthy, it transpired, "are not the people probably best suited to steward it".

It is for this reason 36-year-old Fresia, who lives in London, has joined Patriotic Millionaires UK - a group designed to help the rich give away their money.

With millennials set to inherit huge fortunes - and current millionaires giving away less than ever - younger adults are seeking new ways to part with their cash.

Finding out you're set to inherit a windfall isn't the magical Hallmark moment many might expect, Fresia says. As well as dealing with the trauma of the death that has inevitably accompanied it, often the young "don't want to come out as wealthy to your friends".

And so, he ignored his fortune, working for Médecins Sans Frontières in sustainability, before realising some of the company's investments didn't align with his beliefs.

Things came to a head when Fresia reached his mid-20s. "I really said, 'Ok, I can't run away from it anymore. I’ve got to do something about it" and he began looking into ways his money might make a difference. He had been working for a family firm when he began enquiring about where his money might be put to good use.

He was pointed in the direction of networks like Patriotic Millionaires, which guide people who would otherwise have no idea how to spend their large sums.

"Life became a lot easier because there are incredible advisers that you can pay to give you advice. But in the end, the buck stops with you," he adds.

"If you don't do the personal work of really acknowledging your privilege, understanding your responsibility to redistribute away resources and your power - and so sometimes acknowledging the fact that you're not the best person to make those investment or philanthropic decisions - then, of course, the whole thing doesn't work."

Antonia Mitchell, director of a Philanthropy firms, says that around 40pc of her clients are under 40, typically seeking her help to spend away family money, rather than their own.

Some $90 trillion (£69trillion) will be transferred to American millennials, with 94pc of the wealthiest fifth of households in the UK set to leave a bequest, according to figures from the Resolution Foundation.

“Unfortunately for some other of my relatives who received the money, ended up corrupting their lifestyle and also their mental health, so it wasn't good for them, and that money was wasted."

Yet, unlike their parents, younger generations are most keen to spend on what Mitchell calls "destitution issues", such as refugees, gender or race matters, those affecting the LGBTQ+ community, "and medical research in which, interestingly, they include mental health - which is in stark contrast to their parents who tend to avoid it,"

Mitchell adds. "A lot of these issues tend to be tricky to navigate between their generation and the older generation who have radically different views," she explains. Fresia says that among his age group and below, some wealthy people "do feel really guilty, especially when the history of their wealth is in industries that are a little bit more controversial, like weapons or oil and gas - and it's understandable, of course.

Some $90 trillion (£69 trillion) will be transferred to American millennials

"But it's about switching that to being more action-oriented and saying: 'the money was earned in this way. How can you have a clear reparations plan to make good all the negative impacts that money might have made while being made, and then moving on to redistributing it?' I operate under that mindset.

In typical millennial style, discussions over how to give away large sums often happen via dedicated retreats where attendees, clad in "Tax the rich" T-shirts, visit workshops to confront their "wealth shadows" - the physical embodiment of the anguish their fortune has wrought.

Online networks also play a big part, as does social media. Many groups have formed too, including Donor Revolt and Resource Generation, all dedicated to helping the young syphon off inherited cash. The methods people choose can be somewhat unorthodox. Last year Marlene Engelhorn, a 32-year-old from Vienna, announced that she would be distributing the £21.5m she received from her grandmother's pharmaceutical empire to 50 recipients, who would be selected based on the suggestions from the 10,000 letters she posted out to fellow Austrians, which asked who they thought would be most deserving.

Mitchell says that "giving is easy, giving well is hard, and as they start realising that giving well is difficult, that's when they call me’’.

Her client with the smallest fortune is giving away £60,000; the largest, £1.5m. "I do see a lot of tension," she adds of the family dynamics that ensue - either because parents see their child's giving intentions as the rejection of a gift, or relatives disagree over where money should go.

Mitchell has one client who grew up on the edges of poverty, "Did really well for himself, and his children have grown up in private education... How does he then teach his children the values that have been central to his success?" she says. Financial and social responsibility can be difficult things for rich kids to learn: "Philanthropy is all about your moral compass."

How, or perhaps what, to tell children is a perennial conundrum among many wealthy families. Mitchell's past clients have included the offspring of an entrepreneur who "hadn't realised how wealthy the family was, and then it all came out in the media. And for them that was quite traumatic and quite stressful... they'd read so many articles about rich people doing bad things, and they didn't want to be part of that."

With some of the youngest inheritees now having children of their own, these quandaries are becoming more acute. The question is "really on my mind these days, actually," Fresia says of his four and six-year-old.

“Beyond the money, clarity, I think, is the biggest gift I can give them, because I did not have that. I really didn't"

He admits, however, that "I'm not a super frugal saint." His children go to private school, the family goes on nice holidays, and while he is a "huge admirer" of people like Engelhorn, he says he is "not as brave as them". His risk tolerance has fallen since his invested in good causes).

He feels that his own generation, and the one they have borne, will have a very different experience of inheriting wealth. "A lot of what was happening in previous generations is that because of this paradigm of accumulating and preserving, the younger generation was shielded from knowing how much they were going to inherit and what the money was for," he explains.

"Whereas we are going to be very clear with our young children about the fact that this wealth, especially because it was inherited, is not for the purpose of living an overly luxurious life’’. he says. Rather, Fresia wants his children to learn that the money should be viewed *for the purposes of being a good steward of it and redistributing it"

Beyond the money, clarity, I think, is the biggest gift I can give them, because I did not have that. I really didn't".