Jim has often covered topics on how to protect and pass on wealth to heirs with as few complications as possible. This week Jim and John discuss some of the burdens of wealth. It is not just about passing the money to one’s heirs, it is about creating a legacy and passing on the wisdom that was gained from a lifetime of experience. We’ve all heard about the great family fortunes such as the Rockefellers, Fords, and Kennedys. Most people assume families of great wealth stay wealthy. But surprisingly that is not the case. Unfortunately, in most cases 70% of family wealth is destroyed by the second generation, along with the family unity. After three generations, the loss of wealth exceeds 90%. As an example, William Henry Vanderbilt created one of the great fortunes in American history. However, by 1973, in just two generations, not a single heir was even a millionaire. Experts that have studied the data from thousands of families who have lost their wealth blame a lack of communication and trust. In many cases the senior generation failed to educate their heirs about the legacy, and the responsibilities, they were to inherit. Jim illustrates these issues with two case studies.
.
