Passing down an inheritance can be a life-changing event and navigating the transfer of a significant amount of money and assets can pose certain challenges. Historically, inheritances don’t last. This is so common, it is described as “shirtsleeves to shirtsleeves in three generations.”i There is an oft-quoted statistic that 70% of wealthy families lose their wealth by the second generation and 90% lose it by the third.ii At the end of the day, transparency and communication is key when face-to-face with this transfer of responsibility.
Because it is so challenging for parents to talk to their children about inheritance, scheduling an appointment with a financial professional can help bridge that difficult gap. The first step is making the appointment. If you don’t yet have a financial professional, then you want to do your research to figure out who would work for you and your financial goals. This includes conducting internet searches, reading reviews, and using word of mouth recommendations from friends and family.
Once you have that appointment scheduled with your financial professional, what next?
The first step is to set up a family call to discuss services, expectations, and goals. A financial professional can guide parents on how to talk with children and grandchildren about the inheritance they will receive one day and how to manage the money. They can also offer insight into the importance of maintaining generational accounts. “The handful we’ve done so far have been a hit! This resource is a 20-minute call for you and your family – kids, grandkids, nieces, siblings, parents, in-laws, grandparents, or anyone you consider family,” one financial professional said about the early process of getting to know his clients and what they are looking for.
The family call gives everyone the opportunity to meet each other and make introductions and allows the financial professional to start to formulate a plan on how they can help moving forward, both in a group setting or one-on-one.
The format can be flexible and customizable to your needs as well. All conversations or consultations will be kept strictly confidential. Never is personal information discussed pertaining to you without your permission.
Navigate this transition with the help of a financial professional
With the help of a financial professional, parents and children can begin designing a strategy for long-term wealth stewardship.
It cannot be overstated how critical preparation is when it comes to the pursuit of any long-term goal or strategy. Begin this new journey by scheduling a meeting with your financial professional for you, your spouse, and the loved ones who will one day receive an inheritance.
Getting the help you need from a financial professional can help not only determine the course of action for you to take in terms of choosing the right financial strategy but also help to open lines of communication with your children and other family members regarding inheritance and generational wealth. A financial professional understands that it is a difficult topic to tackle and can approach the subject without the emotional factors impacting the decision-making. The sooner you and your family meet with a financial professional, the more beneficial it can be.
Now that you’re equipped with knowledge on how to transfer your wealth wisely, take the next step in strengthening your financial legacy. Review our generational wealth checklist to get a clear, step-by-step guide on strategies that can help you manage your newfound wealth. Access the checklist here.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
LPL Tracking #820584
Asset options to link as noted above:
LPL Tracking #690600: Navigating Inheritance a Parent’s Checklist for Open Financial Conversations
LPL Tracking #772288: Managing Generational Wealth Checklist
LPL Tracking #772289: Wealth, Family, and Legacy: A Guide for Wealthy Individuals in the Sandwich Generation
Recent Comments