When thinking about legacy, succession, inheritance and passing wealth, the reality is often much different than aspirations. Consider the following statistics on legacy, succession and inheritance:
- Most wealth transfer fails. 70% of intergenerational wealth-transfer fail
- Success depends on mission. 30% of the families that succeeded did so because they had a family mission statement and a plan to accomplish that mission.
- Communication is the key. 60% of all failures are the result of a breakdown of trust and communication.
- And heirs aren’t ready. 25% fail because of a lack of readiness on the part of heir.
- It’s not because of legal documents. Only 2-3% of failures are the result of document problems.
- There’s a belief that family will rule despite the statistics. 88% of family members believe that the same family will continue to control the business in 5 years (in other words there is a belief that family will control without assessing capability)
- Owners think they have a succession plan but few know it. 74% of business owners claim they have a succession plan however 38% of successors didn’t know if a plan existed
- We don’t talk about our wealth. More that 50% of high net worth families had not fully disclosed their wealth while 13% had kept completely silent in telling their kids about their wealth.
- We don’t believe our kids are ready to receive wealth. 50% of those high net worth families did not believe their children were prepared to receive wealth
- There’s a lot of advisor turnover. 90% of heirs reject their parental advisors soon after receiving their inheritances—often with less capability and experience, and 70% of widows will change advisors after their husband’s death
 Carolyn Rosenblatt, “Wealth Transfers: How to Reverse the 70% Failure Rate,” Forbes (December 9, 2011).