The recession has been a wake-up call for the well-to-do, many of whom came to realize that great responsibility should accompany great wealth, according to research by PNC Financial Services Group Inc.

A rising number of high-net-worth people, including Warren Buffett and Bill Gates, seem to be taking the Andrew Carnegie view: that there is only so much money that one family needs and that bequeathing huge sums to the next generation can be dangerous.

PNC's wealth management division released a survey last week saying that wealthy Americans have become significantly more concerned in the past two years that their children are becoming spoiled. About 35% of the respondents said they "believe that my children may be too spoiled by money and have too many material possessions," up from 22% in 2007. Just more than half believe the recession has changed the way their children will manage their finances, and 47% are now discussing money management with their children.

"The recession did something that we hadn't really anticipated, and that is, it shocked affluent individuals into realizing that their affluence would not necessarily guarantee their financial security," said Doug Freeman, a senior managing director at First Foundation Advisors. "The recession has highlighted the need to encourage personal productivity and less reliance or dependence on inherited wealth."

Freeman said that, during the past decade, more high-net-worth people are creating incentive trusts, which encourage certain behaviors or goal orientations.

These trusts come in many varieties, but the main categories are goal-based and dollar-based. All are designed to encourage independence and self-sufficiency. Yet "they are often designed counterproductively," Freeman said. "By that, I mean way too much emphasis is placed on how much money an individual earns as opposed to the quality of the work they do or what their talent or passion is."

If an incentive trust is calibrated to how much a person makes at his or her job, then a lawyer or doctor would earn a large amount and in turn get more from the trust compared to a schoolteacher who might need the legacy more but receive less.

"An incentive trust should be designed to create opportunity," Freeman said, "and encourage and provide the resources to enable individuals to fulfill their own personal dreams, talents and passions."

Carol Kroch, a vice president and managing director heading the wealth and financial planning division at Wilmington Trust Corp., said she is seeing a values piece being added to the discussion throughout family estate planning, with wealthy individuals examining questions of philanthropy, how much is too much for their children and incentive trust planning.

"When I think about the values conversation within families, the notion that money is a tool to driving values is what I hear a lot, and a sense that money can cause harm if not appropriately handled," Kroch said.

Decisions also must be made about what age is right for children to get their inheritance: 21, 25, 30, 35? "The caution is between being too restrictive and not restrictive enough," she said.

As an adviser, Kroch said she warns clients that the danger of drafting a trust too narrowly is that, in 50 to 100 years, family members may be struggling in a very different world. "The tension is between how restricted you want the statement of your values to be versus giving the trustee a flexibility in a future that may be hard for you to imagine."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.