How to transfer wealth successfully

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In my latest Financial Tmes article - Will inherited wealth help or hurt those you love? - I cover the issue of why 90% of families’ wealth doesn’t survive three generations and what to do about it. The following checklist is reproduced from an excellent book called Preparing Heirs: Five steps to successful transitioning of family wealth and values by Roy Williams & Vic Preisser. It doesn’t matter how much wealth you have, as even modest amounts transfered to unprepared heirs can lead to family disunity and disharmony. Use the checklist to assess your own family’s situation.

Wealth Transitions Checklist

  1. Our family has a mission statement that spells out the overall purpose of our wealth.

  2. The entire family participates in most important decisions, such as defining a mission for our wealth.

  3. All family heirs have the option of participating in the management of the family’s assets.

  4. Heirs understand their future roles. Have “bought into” those roles and look forward to performing in those roles.

  5. Heirs have actually reviewed the family’s estate plans and documents.

  6. Our current wills, trusts, and other documents make most asset distributions based on heir readiness, not heir age.

  7. Our family mission includes creating incentives and opportunities for our heirs.

  8. Our younger children are encouraged to participate in our family’s philanthropic grant-making decisions.

  9. Our family considers family unity to be just as important as family financial strength.

  10. We communicate well throughout our family and regularly meet as a family to discuss issues and changes.

You can also get some great insights from this white paper by The Heritage Institute - Sustaining Family Wealth & Unity Across Generations and on page 22 there is a self-assessment tool you can use to evaluate your current situation.

Jason Butler