Aug 1, 2011 12:00 PM

Encourage clients to discuss estate plans with their families to avoid negative consequences

By David Bokman & Jill Shipley

Many wealth management professionals spend a large portion of their time and energy designing elegant, tax-efficient estate plans for their clients. This service is a key component of any comprehensive financial management portfolio. All too often, however, advisors omit a vital part of the service — assisting clients with the sensitive task of discussing the plans with their families. In many cases, negative consequences result. While there are reasons for this phenomenon, there are ways to mitigate the negative outcomes and seize an opportunity to serve clients more broadly and deepen the advisory relationship.

It's a sad fact that, despite the best intentions, most families fail to sustain wealth across generations. While it's easy to assume this failure results from poor or no planning, the reality is that lack of communication and trust, as well as lack of proper preparation of heirs, are the primary causes of wealth disparities across generations. In Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values (2003), authors Roy Williams and Vic Preisser found in a study of 3,250 families that 70 percent of them failed to sustain wealth across generations. Errors in financial planning or taxes accounted for less than 3 percent of the failures. This is often surprising to wealth management professionals who devote their careers to designing technically sound estate plans.

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

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