Passing on wealth is not just about getting financial assets to future generations. It\u2019s also about passing on what you think is important and avoiding damage to your children\u2019s relationships with each other. Unfortunately, research shows that for many families the process goes awry. Here are some steps you can take to try to avoid common and costly mistakes while increasing the likelihood that your estate transfers successfully and lasts through another generation.<\/p>\n
Avoid this unfortunate inheritance situation<\/strong><\/p>\n It\u2019s not an uncommon scenario: The parents pass away and leave the family home to the children, Joe, Bill and Marie. Joe wants to keep the house and live in it to preserve the homestead for generations. Bill is fine with that as long as Joe can buy out Bill\u2019s share. Marie insists they sell the home because the market is hot and there\u2019s a good profit to be made. And so the fighting begins.<\/p>\n Certainly, no family likes to think that the parents\u2019 legacy will turn into a tussle over assets. Yet it happens all too often.<\/p>\n Understand why most transfers fail<\/strong><\/p>\n While wealth transfers fail for many reasons, the top explanation is simple: lack of communication.<\/p>\n Most parents are uncomfortable discussing money with their children. Perhaps we fear such talks will reveal children\u2019s greed or that by talking about inheritance the kids will be less motivated to strive in life. Maybe parents believe such a discussion would be all about trusts, tax strategies and insurance policies. While your financial advisor or investment professional might use these tools to achieve your wealth transfer goals, the real purpose of talking with your heirs ahead of time is to express the impact you hope the assets will have on your family and community \u2014 both now and after you\u2019re gone. Pointed communication of what you would like to accomplish with the assets can help legacies endure for generations.<\/p>\n