We continue today with subject matter we introduced and generally touched upon in a recent blog post. Namely, that is asset transfer from one generation to the next, a topic that understandably commands special relevance for families with above-average asset levels.
Here’s a quick question concerning that: Why is it so difficult to pass along family wealth across more than one generation?
That it is can’t be argued. A recent in-depth Forbes article cites evidence from one notable study of legions of families across decades highlighting that “70% of family fortunes run out by just the second generation.”
That piece emphasizes this key point concerning the successful transfer of family wealth versus its dissipation, which we echoed in our firm’s above-cited June 30 blog post: Failure or success is often centrally determined by purposeful interaction – or lack thereof – between parental planners and their inheriting kids.
We put it the following way in our blog entry. We stressed that “reaching the fullest possible understanding of what will work best generally requires some parental advance planning, coupled with real insight into family dynamics.”
Forbes emphasizes that point by underscoring the critical importance of “early and often” finance-linked communications with children who will one day receive sizable inheritances. The publication makes the logical point that lapsed or flatly absent exchanges concerning family assets will leave prospective heirs “overwhelmed and underprepared” for the day when material wealth is transferred to them.
The obvious question concerning invaluable family communication and wealth-linked strategies linked to inheritances is on how to get optimally started with the process. A proven and empathetic estate planning attorney well versed in working with high-asset clients can fundamentally help with that.