Involving the next generation of heirs in the management of family wealth, and its eventual transfer to them, is often overlooked. Survey shows majority of heirs want to be included and learn how to be good future stewards.
Planning the transfer of your family's wealth can be complicated, usually involving many professional advisors occupied with minimizing transfer taxes. However, it is ironic that planners often overlook the most important element is ensuring the successful transfer: the beneficiaries.
Financial Planning magazine recently weighed in on this issue with an article titled, “Younger Inheritors, Women Concerned About Pitfalls of Wealth.” The article featured the results of a new survey by Campden Wealth and Morgan Stanley Private Wealth Management that studied the opinions of the next generation of high-net worth families regarding their roles in planning for the future transfer of wealth to multiple generations.
The results are telling. 79% of next-generation heirs responded that they wanted to be good stewards of the family wealth. In fact, they wanted more involvement in the finances. It’s clear that families planning for wealth transfers should consider bringing the inheritors to the table sooner rather than later. The educational opportunity is profound when an interest is present.
Interestingly, 79% of the women in the study indicated concern over how the impact might affect them, and their lack of control over potential mismanagement of wealth. Education is certainly essential regardless of gender, but it would seem that women may have a different approach to the management of great wealth.
The biggest take-away from the original article is this: today’s inheritors are eager for information and inclusion. Whether your estate is large or modest, involving the heirs in the management and future transfer will go a long way toward ensuring the preservation of the family fortune for future generations.
Reference: Financial Planning (May 8, 2012) “Younger Inheritors, Women Concerned About Pitfalls of Wealth”