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Mid-range and high-end intergenerational wealth transfer

wealth transfer

Consider This: Are you (and your family) aware of both the direct and indirect ways wealth is transmitted? This can make for a good family discussion about the value and meaning of wealth.

The US Federal Reserve have completed a study on how intergenerational wealth transmission can affect wealth concentration. The issue of “inequality” is a popular one – the notion that the rich are the primary beneficiaries of national economic benefit (at the expenses of others, whatever that means), and the lack of economic mobility. I will tackle these issues in more depth in future newsletters.

The stats in the report are revealing. More than 70% of intergenerational gifts given while the beneficiary is alive are less than USD 50K, but the gifts of greater than USD 1M account for nearly 50% of gifts by value. This points to a two-speed intergenerational wealth transfer: let’s call them mid-range and high-end. This is an important point to note when reading commentary on this issue – these two groups display very different attributes with respect to wealth transmission.

Another important observation of the report are the indirect forms of intergenerational wealth transmission (which apply to both groups). While I abhor popular connotations of the term, they relate to family “privilege” that is self-perpetuating in wealthy families. In addition to financial gifts, a very important thing we can transmit to the next generation is access: to a good education, to a powerful network, and to employment opportunities. The value of these should not be underestimated.

Original article:

Actionable Generational Wealth Succession

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter We will send you the archive links from there.

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