Studies have shown that half of all inheritances are depleted by the end of the second generation with %90 failing by the end of the third generation. For those with very high net worth, the desire to see inheritances preserved is often of paramount concern as they do not want to see decades of hard work squandered by the whims of the next generation. When planning for these clients, take into consideration the circumstances of those set to inherit including past levels of responsibility as well as the status of their personal life. If there are concerns about a beneficiaries ability to manage money the old fall back of a trust is always available and may be set up to offer excellent asset protection as well as flexibility for changing times.
See Dave Lindorff, For Ultrawealthy Elderly Clients, a Different View of Heirs, Financial Planning, May 29, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
