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3 Essential Elements to a Life Well Lived: US Trust

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Three factors are most essential to a “life well lived,” according to the 2015 U.S. Trust Insights on Wealth and Worth survey.

The survey of 640 high-net-worth adults found health is the most essential aspect to a life well lived, followed by family and financial security. Also important were a feeling of connectedness and giving back to society.

“A strong, unified family, and healthy family relationships, is one of the three elements cited as absolutely essential,” Keith Banks, president of U.S. Trust, said on a conference call discussing the results of the survey. “However, first comes health: physical, mental and emotional well-being.”

Family contributes to that well-being, and financial security gives investors the opportunity and ability to act, Banks continued. “These three are essential elements that affect all other aspects of life, shaping perspective and values about what matters most.”

The survey found that health and family take on greater importance for older clients. Millennials rated meaningful work as the most important element in their lives, followed by financial security. Health was their fourth most essential element.

Regardless of the specific elements to a life well lived, most respondents feel they’re on their way, but 81% have at least one area that needs work. The most common area that needs more attention for all age groups — except, again, for millennials, who feel they need to focus on financial security — is health, Banks said.

“More than one-half of respondents said they struggle to balance priorities in different areas of their lives,” Banks said. “We’ve seen time and again the negative consequences of putting too much focus on one area while putting off other important areas.”

About 70% of respondents consider themselves prepared to pay out-of-pocket health costs, long life expectancies and long-term care costs, for both themselves and their partners, according to Chris Heilmann, chief fiduciary executive for U.S. Trust. “That said, fewer than half are prepared for the unexpected, such as a health crisis of their own.” Even fewer are prepared for a health crisis in their family.

Heilmann said that the 2014 report showed a health crisis is one of the greatest risks to family wealth. “A chronic or life-threatening disease, a mental illness, addictions or the untimely death or debilitating condition that can affect one member of a family often affects the whole family, both emotionally and financially,” he said.

The survey found millennials were more likely to invest in preventive measures to maintain good health, while older respondents were using medical and restorative measures. Over 70% of millennials said they had taken a genetic test to predict their risk of hereditary disease or were interested in doing so, compared with 58% of Gen Xers and 54% of boomers. Heilmann said that for three-quarters of respondents, wealth has had a positive impact on their family. “That may not sound very surprising. Given the alternative, of course, you would expect wealth would make life easier,” he said. “But that’s not always the case in all families. The difference really comes down to communication and shared values.”

More than half of wealthy parents said they believed their family would benefit by formal wealth-related principles, but only 10% have created such a set.

About half of parents think they’re setting a good example for their children, but they doubt their kids will achieve their level of financial success, the survey found, and only 20% think they’ll be well-prepared to handle the wealth they’ll eventually inherit. “Is it any wonder, as fewer than one in three have discussed any details regarding their inheritance with their children?” Heilmann said.

Furthermore, parents over 70 say they don’t believe their children will be mature enough to handle family wealth until age 40.

“It’s obvious that a part of the reason for concern about the next generation’s financial preparedness is that many wealthy parents are missing important steps to help their kids develop a healthy relationship with money or to be good financial stewards of family wealth,” Heilmann said.

Respondents were more optimistic about the market this year than in last year’s survey. However, only about a third are willing to take on higher risk for higher reward, down from last year’s results when 42% were willing to do so.

“Some of this may be the fact that the bull market continues to age, and that may be weighing on people’s minds,” Banks said.

— Check out Think Millennials Are Neglecting 401(k)s? Think Again on ThinkAdvisor.


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