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May 01, 2015 at 12:18 PM
The vast majority of wealthy people plan to transfer most of their wealth to family members, but many worry about doing so absent context, conversation, guidance or accountability, according to a report published Thursday by Merrill Lynch’s Private Banking and Investment Group.
The report was based on a nationwide survey of 206 U.S. consumers with $5 million or more in investable assets conducted by Phoenix Marketing International in October.
The survey found that 46% of high-net-worth individuals were concerned about giving too much money, and only about half were confident that the distribution of their assets would have the intended effect.
The greater respondents’ assets, the greater was their reported the level of concern.
Asked when they considered an inheritance or gift too much, 46% of respondents said at the point it acted as a disincentive for the recipient to achieve full potential, and 28% said when it enabled the recipient to indulge in a perpetual life of leisure.
The report suggested that concerns about giving too much particularly worried people who had not clearly identified the purpose of their wealth or defined their values and intent for passing it on.
“Many wealthy families shy away from discussions about wealth, and their avoidance can impede the very real and important process of defining priorities for wealth and giving,” Stacy Allred, leader of Merrill Lynch’s Center for Family Wealth Dynamics and Governance, said in a statement.
“Unfortunately, discussions around wealth tend to occur only at big life junctures, such as an illness or death, when it is often too late to influence the way wealth is distributed, perceptions of the gift by its recipients or how they use it.”
The survey found that the main events that triggered a dialogue about wealth transfer were a health issue, the death of a family member or friend or an initial discussion with a professional advisor.
