5 Mistakes that Destroy Generational Wealth

If advisors help their clients avoid pitfalls in building and receiving an inheritance, they will do a better job preparing them for retirement, according to a recent report from the CFP Board.

Jill Schlessinger, senior CFP Board ambassador, says that up to one-third of Americans can expect to receive a significant inheritance in their lifetimes – planning around that wealth transfer will help clients meet their long-term goals.  Advisors often cite conventional wisdom that family wealth dissipates in three generations.

“We kind of call this the fat, dumb and happy moment, the heirs become fat, dumb and happy in generation three and they forget about the jobs they’re supposed to do as stewards of wealth,” says Schlessinger. Families today face demographic pressures – older generations are living longer, and younger generations are taking longer to become independent, often causing generational wealth to dissipate faster than expected.

Schlessinger cites other research, from Ohio State University’s Center for Human Resource Research, that shows that Americans save only half of what they receive from an inheritance.

from FA News http://www.fa-mag.com/news/5-mistakes-that-destroy-generational-wealth-32855.html

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