It is very common for wealthy families to squander their wealth through years of waste and poor decisions. “Indeed, 70 percent of wealthy families lose their wealth by the second generation, and a stunning 90 percent by the third, according to the Williams Group wealth consultancy.” Individuals and families with large amounts of wealth should carefully plan ahead to preserve and grow that wealth over the generations. Wealthy individuals should create a financial road-map and be open with heirs to help them develop wealth management skills. Beneficiaries of large fortunes are often unprepared for handling wealth. If a person wants to avoid being a statistic, they should prepare future generations of heirs for the complex responsibilities of estate management.
See Chris Taylor, Your Money: A little honesty might preserve the family fortune, Reuters, June 17, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
