Most Family Transfers Are Flawed Problem is, there’s a 70 percent failure rate when transferring family wealth from one generation to another — a loss of control of assets through mismanagement, poor investments or the like, according to Roy Williams and Vic Preisser, two of the founders of the Institute for Preparing Heirs.(MORE: Sandwich Generation: Large Gifts to Family Can Be Tricky) Many of these failures occur because families don’t do enough to prepare their heirs for the handoff.It’s like giving your 16-year-old son the keys to your car without a driving lesson.
That brings me back to the family meeting about your estate plans.
The Conversations Parents Don’t Have Unfortunately, most parents fuel rather than prevent this kind of havoc.
They think: “I’d rather not talk about it” or “We’ll set up a time to chat about it later.” The “it” in these phrases is, of course, money.
That’s because one of the most contentious aspects of settling an estate can be the distribution of things like Mom’s diamond engagement ring, Dad’s collection of abstract expressionist artwork or Great-Grandma’s gold-plated china.
This is just as true for items that aren’t worth much money, but have a great deal of sentimental value.