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May 12, 2017 at 12:27 PM
Nearly 30% of family leaders have no plans to share inheritance details out of fear of demotivating heirs, according to a new survey.
The study titled “Navigating the Wealth Transfer Landscape” by Campden Wealth, the Institute for Private Investors, and Wilmington Trust included 57 research participants that belong to families with a net worth of at least $20 million, including 72% with a family net worth in excess of $50 million.
The study finds that there are inheritance concerns among wealth holders and family leaders.
Among wealth holders, 67% are apprehensive about sharing inheritance details, and only 10% provided complete information about the amount of inheritance to their heirs, according to the study.
“It’s natural for leaders of multigenerational families to be protective of the younger generations. They simply want what’s best for their children and grandchildren,” said Tom Rogerson, senior family wealth strategist at Wilmington Trust, in a statement. “Preserving family wealth across generations requires making sure the next generation is ready to receive the money. A strong family culture that promotes education and open communication is vital for success.”
The top reasons why inheritance information is withheld are concerns about demotivating or disempowering heirs (29%) and haven’t decided what assets to leave heirs or how to do it (19%). Wealth holders also fear heirs will rely on wealth that might not materialize (10%).
Despite these concerns by the wealth holders, the study finds that the majorityof inheritors do not significantly change lifestyles after windfall. According to the study, 63% of inheritors in the study plan to continue to work – 45% at their present job, 11% at a reduced level and 7% at a job they want to do. Meanwhile, 4% said they plan to focus full time on philanthropic causes.
