Advisors can also encourage clients to begin teaching the next generation wealth sustaining habits while they are young. One way is to be concise with kids from an early age when it comes to discussing money and individual values, says Gallaway from YorkBridge Wealth Partners.

For example, getting paid for doing chores or “work”, discussing causes that are important to the family, and getting children involved in raising money and volunteering for those causes can help shape the next generation long before they receive an inheritance, she says.

Gallaway notes that having family discussions based upon a clearly set investment and financial policy statement is key to sustaining family wealth and avoiding conflict.

The Transactional Trap

Gifting without a clear plan can lead to confusion and a waste of money. Gifts should not only be evaluated as a tax mitigation tactic, but should connect to a larger goal or purpose. Advisors should ensure clients have a vision for what they want to accomplish through gifting, and clearly communicate that vision to beneficiaries.

Divorces and Deaths

Higher divorce rates have made accidental disinheritance more common. Advisors should ensure beneficiary information is regularly updated to help safeguard against this consequence in the event of a divorce. Advisors can also help make estate-planning decisions to make the transition smoother after a death. 

"Advisors can't simply check the box when working with their clients on estate planning," Swain says. "As too many horror stories attest, the original intent can easily get missed, especially when memories and marriages have long faded."

Technical skill and tax minimization strategies are critical when working with HNW families. However, the emotional drivers of individual group dynamics dramatically influence the longevity of family wealth, the study finds. Advisors can benefit from understanding these relationships and incorporating them into their financial planning practices. 
 

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