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Thursday
Jun202013

Steps to Prepare Heirs for Successful Transfer of Family Wealth

 Roy Williams and Vic Preisser have been studying wealth transition for some time.  Their research of 3,500 families’s duplicated the 70% failure rate of wealth transfers from one generation to the next as cited from previous studies.  In their book, Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, the authors outline steps to achieve a successful transition. Whether you have a family business, millions to pass on, or more modest amounts, you will likely find some of the suggestions may meet your needs. The first step, Assessing a Wealth Transition Plan, the authors develop a wealth transition checklist which includes:  Heirs understanding their future roles, heirs reviewing the family estate plans and documents, and creating a family mission with incentives and opportunities for heirs.

And if you are interested in avoiding falling into the 70% trap, the research on wealth transition failures will be of interest. Three factors emerged as to why successful transitions failed.  The first is a breakdown of communication in the family—often coming from a lack of trust within the family.  The second is a lack of preparation of the heirs---particularly if one person was to be the dominant manager and was not ready to take on that role; and the third factor is a lack of clarity of roles of family members in the management of family assets.

Passing on wealth from one generation to the next doesn’t work on autopilot. If you don’t want to go from “shirtsleeves to shirtsleeves in three generations”, take the time to make sure your children and grandchildren are involved in the transfer of wealth from the beginning.


The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  The services and  opinions of Roy Williams and Vic Preisser are independent of Raymond James. You should discuss any legal matters with the appropriate professional.