The Great Wealth Transfer Is Happening Now. Are Families Ready?

(NewsUSA) - Over the next two decades, more than $84 trillion in wealth is expected to transfer from Baby Boomers to younger generations.

This so-called "Great Wealth Transfer" marks the largest intergenerational handoff of wealth in history. The question is: are families truly prepared?

Without proper planning, this wealth can be lost in a generation. Data shows 70 percent of families lose a portion of their wealth due to interfamilial conflict, with nearly 60 percent of estates ending up under court control because of improper estate planning. 

This intergenerational wealth transfer puts familial relationships under unprecedented strain, heightened in today's globalized and blended family structures, where cross-border assets and multiple marriages add new legal and emotional elements.

Blended families and ones with estranged members face particularly challenges, with inheritance issues often magnified in households with ex-spouses, new partners, or children from previous marriages. 

More than half of wills are contested among these families. Disputes can arise when surviving spouses are granted significant control or perceived favoritism creates resentment among heirs.

Inheritance battles among heirs aren't the only risk. Older, high-net-worth individuals may find themselves vulnerable to manipulation. Potential heirs may exploit weakened relationships or unclear succession plans to access wealth prematurely – or even take control of family businesses.

While Rupert Murdoch's high-profile legal dispute with his children ended well for him in protecting his empire and succession plan, the ongoing legal case involving another media mogul, Polish billionaire Zygmunt Solorz illustrates the complexities at play. Solorz is entangled in a dispute with his three children over control of his media empire. 

Court filings suggest that the billionaire was manipulated by his children into initiating a premature succession process, exploiting the company's financial holdings in Liechtenstein and engaging in a hostile takeover of his business - leading to a continuous decline in stock prices and harming shareholders.

While these two examples involve ultra wealthy individuals, the cases serve as a warning to baby boomers on the importance of wealth management and asset protection to prevent interfamilial conflict especially for family businesses from Wall Street to Main Street.

Improper handling can fracture families, derail business empires, and lead to significant loss in generational wealth. 

With the Great Wealth Transfer underway, thoughtful, professional, and forward-looking preparation is needed to protect assets, preserve relationships and legacies across generations.