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Is your family like the ostrich with its “head in the sand” when it comes to passing your estate to the next generation?

I am afraid so when you consider the following statistics:

  • 75% of affluent families say it’s important to leave an inheritance to the next generation while only 20% strongly agree their children will be prepared to handle the wealth they receive.
  • 54% of the wealthy believe their family could benefit from developing a formal plan with principles and values, only 10% have formalized the process.
  • 90% of affluent families say their estate plans do NOT address their goals, wants, and objectives. This is a true disconnect.

Is your family wrapped up in the estate planning tools to preserve your wealth at death vs. transferring the values that created the family wealth in the first place? Those values most likely included determination, knowledge, goal setting, a sense of urgency, and gratitude towards others to name a few?

How do we avoid this? Some first steps:

  • Develop a mission statement that includes your family values.
  • Be transparent about the estate planning – 89% of beneficiaries who knew the details of the estate plan report that they were satisfied with the estate distribution vs. 65% that did not know the plans.
  • Tie your estate planning into your family values and mission statement.
  • Review your planning and family values in an annual meeting.

This process should be looked at as a long-term project for the first few years until everyone becomes comfortable with the objectives, values, and mission statement. This process gives a family a stronger chance to pass their legacy along to succeeding generations.

For more information on this topic or a review of your situation, please do not hesitate to contact me.

Peter B. Smith is a Family Wealth Advisor at the Planning Solutions Group in Fulton, MD (psmith@psgplanning.com) and is an Annapolis resident. He can be reached at 301-543-6008 or by email at psmith@psgplanning.com.