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Considerations for Wealth Transition

By Wealth TransitionMarch, 2021March 18th, 20243 min read
Considerations for Wealth Transition

A successful wealth transition means the family stays intact and they maintain control of the assets. Ideally, you’d like both. Some families can only achieve one, and some end up with neither.

People often setup their estate plan so that it will avoid tax and preserve wealth, but they’re really not paying attention to the impact of their plan on the next generation. The biggest risk to their assets is not the market or the business or even the competence of the people they have supporting them. It’s actually the people sitting around the dinner table. If they can’t function as a family, then it may end up losing both the family relationships and the family wealth.

Give with a warm heart or a cold hand? It’s a parent’s prerogative on how they plan to spend and gift their wealth. However, with people living longer and a lack of planning around proper wealth transfer, many people are receiving their inheritance at the wrong time in their life. One benefit to beginning the gifting process early is being alive to see how your children benefit. You can watch and support/advise (you may want to ‘advise’, but your children may want and need your ‘support’) them on taking risks, making key purchases and enriching their lives 

Poor communication is the cause of most failed succession plans. Despite death being one of the few certainties in life, it’s amazing how difficult some people find it to talk about it. Being transparent and open about money with your family and the responsibilities it conveys can be a valuable education piece for your children.

Families don’t just inherit wealth, they inherit the same patterns. It’s also important to be aware of the patterns (positive and negative), and whether they are helping or hindering family members.

Consider This: Is your wealth transition plan ‘just’ an estate plan? What is more important (if you could only have one): being a family or a group of co-owners? How much do you ‘invest’ (with a long term outlook) in each of those?

Original articles:

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Actionable Generational Wealth Succession 
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