Houston Estate Planning and Elder Law Attorney Blog
To make that wealth last forever, you're probably going to need future generations to replenish that wealth.
If you have wealth to pass on to the next generation, have you hoped that your wealth will continue on for generations to come? It's a tough goal to have, considering you'll be depending on the next generation to keep the wealth going instead of squandering it away. However grand your goals may be, there is a startling trend of inheritances that fail to lift up the family.
The startling trend of failed inheritances is known as "shirtsleeves to shirtsleeves", and Reuters picked up on the issue in a recent article titled “How wealthy families blow their assets.” It seems the kinds of problems that can arise within a family are multifaceted, but the numbers tell a similar story: inheritances have a failure rate at 90 percent by the third year.
There is no tried and true formula for a successful family inheritance from generation to generation. Nevertheless, there are some important thoughts to consider in your planning and in your conversations with your family. Managing wealth is about responsibility. Therefore, not only do you have to be thoughtful and responsible in your own giving, but you want to encourage and inculcate thoughtful responsibility throughout the family.
As the original article mentions, most heirs have a dubious understanding of how to manage an inheritance in the first place – how to use it and live with it, rather than grind it down. Fortunately, but this is a learnable skill.
So how will you teach your heirs and help ensure prosperity for your family, your heirs and even your heirs’ heirs? It’s a difficult challenge but a worthy goal.
Reference: Reuters (May 6, 2014) “How wealthy families blow their assets”