You work hard to build your family business, looking forward to the day when your children will reap the rewards. But when a substantial portion of the ownership or assets of a family business is transferred to one or more offspring, it can cause a phenomenon known as Inheritor Syndrome.

Inheritor Syndrome –a subset of Sudden Wealth Syndrome – results when a younger generation inherits a windfall that has been created by the work of the preceding generation. Not having to work for this windfall can produce significant psychological and practical problems.

The inheritors of the business may feel disconnected from themselves and others, be out of touch with reality and fail to find meaning, passion and drive in life. The syndrome is also characterized by a feeling of overwhelming helplessness. The younger generation may also lack depth in their relationships and fall prey to substance abuse.

In addition to causing personal problems, Inheritor Syndrome can be problematic to the family business if the heir receives some control over the organization. The phrase “running the business into the ground” may potentially apply if Inheritor Syndrome is left unchecked.

Making the syndrome even more perplexing is that people affected rarely admit they have a problem because of guilt or shame. Parents and other family members will often deny there’s a problem until it has caused significant disruption. And even if the problem is noted before it causes damage, a family that waits until after a son or daughter has inherited assets or control may find it difficult to prevent a negative outcome. The best solution is to plan early to avoid the problem altogether.

Some ways to help prevent Inheritor Syndrome include appropriately designed trusts, the use of family charitable foundations, financial training and ongoing, age-appropriate education about the family business and managing the family funds. Teaching younger children the value of money and the practice of saving can also be effective.

Making certain that heirs who will receive ownership have hands-on knowledge of all aspects of the business can reduce the possibility of their feeling overwhelmed in the event they suddenly find themselves in control. The earlier preparation begins, the more likely it will be effective, so it’s best to start when the heirs are young.

The good news is that raising responsible, knowledgeable and involved children will reap rewards not just in business but in all areas of family life.