During the next 10 years the world’s wealthiest families will collectively transfer more than US$15 trillion to the next generation. This huge transfer of wealth will be subject to complex transactions and negotiations and if not properly managed, financial decisions may be taken which imperil the wealth for future generations.
Intergenerational wealth transfer is complex because it brings together money, power and love. Within many families there are hidden pressure points and deep-rooted behaviours at play that often cause conflict, hindering effective communication about succession planning. IN short, the process needs to be handled carefully.
Here, Paul Barrett outlines common obstacles to the successful transfer of wealth and steps to help you avoid conflict and the erosion of family capital.
Trust is fundamental to successful wealth transfer; however, wealth creators often doubt the next generation’s ability to manage the money or the family businesses that they want to pass down.