Estate Planning and Heritage Design

April 14, 2015 Hull & Hull LLP Estate & Trust, Estate Planning, In the News, TOPICS Tags: , , , 0 Comments

An article that appeared in the Wall Street Journal this past weekend highlights an important issue that is often overlooked when individuals plan for the distribution of their wealth after death.

The article suggests that 70% of wealth inherited by a younger generation is lost, and that, by the time that the inherited wealth makes it to a subsequent generation, only 10% of its original value typically remains.

In Canada, where 40% of individuals rely on a family inheritance to fund their retirement, such poor rates of intergenerational wealth preservation could present a serious problem.

In addition to obtaining formal lawyer assistance in creating a formal estate plan, the article refers to a new approach to preserving wealth called “heritage design”.

Heritage design uses “pre-inheritance” intergenerational experiences to foster the preservation of family wealth.  This approach, which supplements estate planning, involves annual meetings with the testator and his or her beneficiaries, at which time family values and traditions are reinforced and younger generations learn how to manage funds which they can expect to eventually inherit.

Family meetings during which an estate plan is discussed and explained to beneficiaries has the potential not only to assist in the preservation of family wealth from generation to generation, but also can help prevent disputes over the intended distribution of an estate after death.


Thank you for reading.

Nick Esterbauer

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