Will your family lose your wealth upon inheritance from you?
A concerning statistic is that 70% of families will lose their wealth with the second generations’ inheritance and then 90% will lose it by the third generation.
This is a sobering statistic due to half of parents and other family members not being willing to discuss their Will or legacy with their children or other family members.
A process set with specific controls can be put in place to provide education and mentoring to family to learn about the management of money. Understanding the world of money, finance, banking and taxation are all necessary skills that do NOT come with inheritance. We encourage family meetings in our offices so that families can work together and benefit from this process. In many cases this offers a sense of relief to our clients because it establishes a process for dealing with the unexpected and puts in place a safety net and a relationship process with the family of our clients. Meeting the relevant family members and introducing the process, privacy requirements and financial process puts everyone ‘on the same page’ and provides comfort.
An example of the privacy requirements related to a client who went into hospital for what he thought was a simple operation. Unfortunately, he did not survive the hospital visit.
His wife who had dementia was now on her own and the plans to arrange for her and her husband to previously move into a retirement and special care facility were not to happen. The privacy act did not allow us to discuss this financial situation with the son because we did not have authority. A simple Power of Attorney for loved ones does lapse upon death but one for each parent would have been very useful. In this instance the executor of the estate had to contact us and assist to put matters in order. Being an executor comes with a lot of responsibility and could potentially involve a loss of funds if the executor does not handle the estate properly.
Special ownership structures can be put in place to allow a suitable set up to acquire money skills. Money management with informed decisions involving investment type, taxation treatment, ownership structures and distribution options can protect and provide benefits for the continuous wealth of the family and descendants. Let us help you move through this process to assist and alleviate stress with guidance for decisions and put in place regular attention to these matters for ongoing comfort.