Study Shows Inherited Wealth is Squandered

12/20/2011

A recent study reported in Forbes showed that inherited wealth is squandered 70% of the time. 

Why is this the case?

The study found that the successful 30% had all actively engaged in transition planning, in addition to simple estate planning.  The study indicated that proper estate planning should focus not just on how to leave property, but also on educating beneficiaries on their new found wealth, how to protect it, how to manage it and how to grow it.  In other words, teaching the beneficiaries the family philosophy on wealth and wealth management, including philanthropy.

If you have a family business, this is extremely important because for it to remain a "family business" the family has to know about the business, how to run it, and how to think about it. To be successful, hands-on training is usually required.

But aside from a family business, there is still a lot that beneficiaries can learn about wealth and investments in general.  Hands-on training with all types of family wealth can make a big difference.

In the end, to overcome the odds against the successful transfer of your family wealth, work together to form a plan, to understand it, and to put it into action.