A new study surveyed over 4,500 individuals and interviewed 16 “very wealthy families” from North America, Asia and Europe. Researchers with the study were attempting to determine what the most powerful people in the world plan to do with their fortunes. Surprisingly, a large number claim they will not be leaving their fortunes to their children. The article noted that this was particularly true of second generations of wealth considering the future of their children, the third generation. The mindset was that the first generation built the wealth; the second generation preserved it while the third generation was likely to lose it.
Instead of allowing their heirs to become part of this trend, these wealthy families are building estate plans that are designed to help their children succeed. Some noted that they are moving away from the traditional trust notion for fears that children who rely on funds from a trust lack self sufficiency. Some are leaving their fortunes to charities, while others are using the funds to establish a business that their heirs could have a “renewed sense of direction.”
Among the wealthy are a few notable famous figures. Nigella Lawson, food critic and judge on ABC’s hit show The Taste, was quoted as saying she would not leave her fortune to her children because doing so “ruins people”. Former Police front man and musician extraordinaire Sting has taken a similar pledge, stating his children will not inherit his millions.
Although the majority of Americans do not have these same concerns, one thing we do have in common with the world’s most wealthy families is the need for an estate plan to make sure our assets are distributed according to our wishes. Whether creating an initial estate plan or having an existing estate plan reviewed, it is wise to contact an estate planning attorney to guide you through the process and better ensure the right legal tools are used to meet your wishes.
Source: MailOnline, “How the other half fear: Super-rich worry that their wealth is killing drive and ambition in their children,” Chris Pleasance, June 22, 2014