Families that have wealth often have concerns about whether their heirs are prepared for the responsibilities of managing the family fortune. “Unfortunately, 70% of family wealth is destroyed by the second generation, and family unity is destroyed right along with the wealth. After three generations, the loss of wealth exceeds 90%.” There are some families that are able to avoid the statistics by properly preparing heirs with an “intellectual inheritance” as well as a financial one. Lack of communication and trust within families can often lead poor planning and heirs not being prepared to manage the wealth that they inherit. Families should be open with each and and should regularly meet and plan. A “heritage statement” should also be created to chart out the families goals and vision.
See Brian Luster and Steven Abernathy, Preparing for Inheritance: How to Avoid Losing It All, Barron’s, November 7, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
