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10 Key Statistics on Family Legacy

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:

  1. Most wealth transfer fails. 70% of intergenerational wealth-transfer fail[1]
  2. 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.[2]
  3. Communication is the key. 60% of all failures are the result of a breakdown of trust and communication.[3]
  4. And heirs aren’t ready. 25% fail because of a lack of readiness on the part of heir.[4]
  5. It’s not because of legal documents. Only 2-3% of failures are the result of document problems.[5]
  6. 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)[6]
  7. 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[7]
  8. 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.[8]
  9. 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[9]
  10. 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[10]

[1] Carolyn Rosenblatt, “Wealth Transfers:  How to Reverse the 70% Failure Rate,” Forbes (December 9, 2011).

[2] Id.

[3] http://familiesandwealth.blogspot.com/2010/06/10-questions-for-vic-preisser-of.html

[4] Id.

[5] Id.

[6] https://www.familybusinessinstitute.com/wp-content/uploads/2016/02/Family-Business-Succession-Planning-White-Paper.pdf

[7] Id.

[8] http://www.ustrust.com/Publish/Content/application/pdf/GWMOL/2012-UST-Insights-Wealth-and-Worth-Highlights-Brochure.pdf

[9] Id.

[10] http://blog.bsmg.net/wealth-transfer-why-are-advisors-missing-the-mark

About Bill High

Bill is CEO of the National Christian Foundation Heartland. He works with families, individual givers, and financial advisers to share the foundation’s message regarding biblical generosity and charitable giving. He is the co-author with David Green of Giving It All Away and Getting It All Back Again: The Way of Living Generously: www.givingitallawaybook.com. » Learn More

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