Accumulating wealth can be difficult. Maintaining that wealth is also a fairly troublesome task. Business owners and other high net worth families in Florida often struggle with ensuring the continuation of their wealth from generation to generation, but this does not necessarily have to be the case. With careful estate planning and open lines of communication, families can better ensure generations of ongoing wealth.
According to The Williams Group, approximately 70 percent of high net worth families lose their wealth in the second generation. By the third generation, 90 percent of families have said goodbye to their wealth. Although all families are unique and there are likely many different factors at play, The Williams Group found that there were three primary causes — breakdowns in familial trust and communication, unprepared heirs and other issues such as tax or legal problems.
The first two causes may be surprisingly easy to address. Parents who are planning to pass on their wealth can improve communication and trust by making their relationship with their adult children a priority. This means no skipping generations to focus on grandkids, although these individuals can certainly cultivate these relationships on a personal level.
Improving relationships with children will open up important lines of communication with future heirs. This can make it easier to share details of an estate plan. While adult children might not need to know every last detail of their parents’ plans, they do need a basic understanding of what is going on. After all, a better prepared heir will be more adept at properly managing their inheritance.
Discussing matters that involve death is no small matter, but Florida families who get over this hurdle are more likely to ensure lasting wealth across multiple generations. However, dealing with other issues like legal and tax problems can prove to be harder to address. To ensure that these matters will not interfere with the proper transfer of wealth, many people choose to work alongside and experienced estate planning attorney.