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Financial Planning > UHNW Client Services > Family Office News

UBS: Affluent are avoiding inheritance discussions with kids

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Nearly half (46 percent) of benefactors have not discussed their inheritance plans with their children, according to new research. 

UBS Wealth Management Americas (WMA) discloses this finding in its latest quarterly UBS Investor Watch report, which explores the issues around inheritance and why families avoid the topic. This eighth edition of UBS Investor Watch polled 2,882 U.S high net worth and affluent investors, the core sample of 2,474 investors having at least $250,000 in investable assets; 1,121 have at least $1 million in investable assets.

The survey finds that while both benefactors and heirs are optimistic about giving and receiving inheritance, neither is actively engaged in inheritance planning and are reluctant to discuss the topic before a death in the family occurs.

The research identifies the following as the main barriers to discussions about an inheritance among survey respondents:

  • It doesn’t feel like a pressing issue (43 percent)
  • They don’t want their offspring to count on the inheritance (32 percent)
  • They don’t want their children to feel entitled to wealth (27 percent)

Three in four benefactors also view it as highly important that their children use their inheritance wisely and don’t squander it.

For those on the receiving end of a potential inheritance, their top barriers are:

  • Their families don’t talk openly about financial issues (46 percent)
  • It does not feel like a pressing issue (31 percent)
  • They do not want to appear greedy (23 percent)

The survey adds that when heirs know the details of the inheritance plan ahead of time — i.e., they have seen the will, know approximately how much wealth there is, how it will be divided and where the assets are — they are more satisfied with the inheritance process (89 percent). Additionally, when heirs do not know the details ahead of time they are more than twice as likely (27 percent vs. 12 percent) to disagree with family about the inheritance distribution.

The situation is worse when there is an unresolved issue, such as who is going to inherit the family home, prior to a parent’s passing. In these cases, satisfaction among heirs plunges, and the likelihood of disagreements about the inheritance distribution skyrockets (82 percent vs. 11 percent). Sensitive issues like deciding the fate of the family home may not be simple to resolve prior to a parent’s passing, but it will only be more complicated after they pass without clarifying their intentions on inheritance.

Regarding blended families (second marriages involved), where disagreements among heirs are more common (27 percent vs. 15 percent for nuclear families) and satisfaction with the distribution process is lower (56 percent vs. 83 percent for nuclear families), having the conversation is more important.

Read the full report here.


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