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July 23, 2014 at 05:32 AM
Inheritance is not being discussed at the dinner table.
But it should be, according to UBS Wealth Management Americas’ quarterly UBS Investor Watch report, released Tuesday.
The report found that nearly half (46%) of benefactors have not discussed their inheritance plans with their children. And only 34% have revealed their wealth. More discussions lead to better and happier wealth transfers — and, as the report points out, an estimated $40 trillion of personal wealth expected to change hands by 2050 means there is a lot to talk about.
“Inheritance can be a complex and sensitive issue for both sides, parents don’t want to talk about mortality and children don’t want to appear greedy by bringing it up,” said Paula Polito, client strategy officer for UBS Wealth Management Americas, in a statement. “But the fact of the matter is that it’s a conversation that needs to be had among families. Open lines of communication and advance planning are critical to ensuring a smooth transfer of wealth and to preventing future conflict among heirs.”
When heirs know the details of the inheritance plan ahead of time, the report found that 89% were more satisfied with the inheritance process. According to the report, based on a study of more than 2,800 high-net-worth and affluent U.S. investors from June 24 through July 7, “when heirs do not know the details ahead of time they are more than twice as likely (27% vs. 12%) to disagree with family about the inheritance distribution.”
Several emotional factors are helping to deter these kinds of conversations. Nearly a third of benefactors don’t want their offspring to count on the inheritance, and 23% of heirs don’t want to appear greedy. Another common barrier facing both parties: estate planning doesn’t feel like a pressing issue, according to 43% of benefactors and 46% of heirs.
While the report found several factors keeping benefactors and heirs from talking openly about inheritance, both sides agreed it should be up to the benefactors to start the conversation and ease the barriers.
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