A study released Tuesday by U.S. Trust identified wealthy families’ collective health as a risk to wealth. Long-term care, out-of-pocket health care costs and financial support for other family members take their toll on families.
Furthermore, these risks aren’t well-addressed in financial plans, the report noted.
U.S. Trust surveyed more than 700 families with at least $3 million in investible assets for the report and found some issues advisors need to address with their wealthy clients.
For example, while 47% of respondents said they had a financial plan to provide long-term care for themselves and their spouses, just 18% have planned for having to support their parents as well. If their parents need it, wealthy families are likely to provide it, too: 63% of respondents said they would feel obligated to support their parents and in-laws.
That obligation extends to other family members as well. The survey found 55% of respondents would feel responsible for supporting less fortunate siblings, and 56% would provide for their adult children.
“The majority of people we surveyed grew up in middle-class families and created their own wealth,” Keith Banks, president of U.S. Trust, said in a statement. “They don’t see themselves as wealthy, and many are unaware of risks and circumstances that grow increasingly complex as wealth accumulates.”
While 88% of respondents said they felt financially secure, households on the highest tier of the high-net-worth segment were likely to say they didn’t feel secure.