If the younger generation doesn’t know how to preserve wealth, the money may not last very long.
While transferring intergenerational wealth can be handled through good estate planning, it appears that making plans is not necessarily enough to for the wealth to be properly preserved, according to Forbes in “The Rich Open Up About Family Wealth.”
The U.S. has had many wealthy families. However, we rarely hear about all of the descendants of wealthy people who do not have any of that wealth left.
The central problem is that the heirs of the wealthy are not guaranteed to value the wealth as much as those who created it. Even when they do value the wealth, they might not have the right knowledge to know how to preserve it.
There is no good wealth management gene that can be passed down along with the wealth.
What this means is that families need to talk about their wealth.
Younger generations need to be educated about how difficult it was to create the wealth and how they should go about making sure the wealth they inherit, will be preserved for their children and grandchildren.