You’ve worked hard your whole life to build up money you can pass on to your children. You think of it as a lasting legacy to them, something to give them an advantage and make their lives easier.
If you have, though, you should know that 70 percent of rich families see that wealth deteriorate so quickly that it’s all but gone by the time it gets to the second generation.
One man said his grandparents had accumulated wealth that today would have been worth $70 million. He said that going to see them when he was a kid was astounding. They wore tuxedos, and they owned farms, mansions, summers homes, boats and airplanes. However, he never got any of that tremendous wealth, because it was wasted by his parent’s generation before it could get to him.
Certainly, he’s not alone. The same study that found 70 percent of these rich families see wealth thrown away by their kids also found that 90 percent of them saw the wealth disappear by the third generation. This was when considering those with at least $3 million.
So, no matter how hard you worked, the odds are very good that your money won’t make it through to your grandchildren, and they’re even worse that it will make it to their children. The reasons vary, but the trend is clear.
Keep this is mind when doing your estate planning. There are things that you can do to protect your wealth and ensure that it won’t be entirely wasted in short order. Use all of your options to set up a plan that gives your family lasting success.
Source: Time, “70% of Rich Families Lose Their Wealth by the Second Generation,” Chris Taylor, accessed Nov. 15, 2016