A recent article on Forbes.com took a look into the surprisingly high rate at which intergenerational wealth transfers fail. This is undoubtedly a major issue of consideration for estate planning attorneys in Bethesda and Largo and beyond. Our goal is for your wishes to be followed both in specific and in the spirit of your intentions. So, if transfers are failing, it makes sense to examine why and learn how to avoid these issues in the future.
According to research done by Roy Williams and Vic Preisser, intergenerational wealth transfers fail a staggering 70% of the time! The main factor in the failures was that the families themselves did not implement any post-transition planning. That is to say, the heirs were never prepared to take on the privileges and responsibilities of inheriting the family’s wealth.
On the contrary, the study found that families that were successful in preserving wealth had put forethought and preparation into how their wealth would be passed down. These families cited having a unified “family mission” and “strategy” as being exceptionally important tools for keeping everyone on the same page.
For example, if family wealth was often used for philanthropic purposes, the younger generations would have a hand in this type of administration before the head of the family ever passed on. Or, in the case of a family business, children and grandchildren would be given opportunities to participate and learn early on what may be expected of them in years to come.
The obvious conclusion to draw from the numbers is that most families with a lot of wealth are simply not preparing the next generations for the roles they will play. This, coupled with potential strain and animosity among family members, has led to a reality in which the vast majority of intergenerational transfers of that wealth are simply failing.
Whether you are the family matriarch/patriarch who will be passing on wealth, or you are a member of the generations that will be receiving it, you can start the important conversations that can ultimately rescue your family. Working with a Bethesda or Largo estate planning attorney and seeking other professional assistance is the perfect first step to getting your family on the right track for continued financial success.
Kinsey Law Group, P.C. was formed to focus on the needs of families. We are dedicated to assisting you in the areas of Estate Planning and Assisted Reproduction/Surrogacy. If you have questions or concerns, you’re invited to call 301-968-1630 or send an e-mail anytime, without cost or obligation.
Locations: Montgomery County (Bethesda, Maryland); Prince George’s County (Largo, Maryland) and Washington, D.C.