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  • Writer's pictureRandall Fisher

Legacy Lost: The Dwindling Family Inheritance

Ninety percent of family inheritance is often lost within just three generations, according to the Wall Street Journal (Lost Inheritance).  By the end of the second generation — to be clear, that’s after your children have passed away — you can expect 70% to be gone.

This bodes particularly ill for the massive wealth transfer of the baby boomers, who are set to inherit $7.6 trillion — equivalent to the GDP of China — over their lifetimes, mostly in their later years.

(Credit: Wall Street Journal)

Given how the bottom has fallen out of interest rates, the volatility on Wall Street in recent years, and the sluggish recovery of a real estate industry still trying to pick itself up off the mat, it seems there is no shortage of reasons for this generation to be concerned about its financial legacy.  And that’s just the economy.  

Factor in the traditional ways family wealth is lost — through taxes, the thin spread of inheritance over a sprawling family tree, inept or unscrupulous investment advice, and simple profligacy — and you see what the baby boomers truly face: a perfect storm to batter bank accounts, conditions ripe for someone — too many someones, at that — to write a how-to guide on losing an inheritance.

I don’t know about you, but in the immortal (if abridged) words of Danny Glover, I’m too old for this.  What exactly can we do to break what the Journal so aptly names this “cycle” of lost inheritance?

Well, you have to find the root of the weed before you can yank it out.  Which is why the findings of the family-wealth consultants at the Williams Group (cited in the Journal) are so important.

The Williams Group surveyed 2,000 wealthy families over 20 years and discovered that the most common reason (60% of the time) for the steady deterioration of family wealth is distrust and a failure to communicate among family members.  Every family grinds and sparks from time to time, and an inheritance can easily become a powder keg.  Deftly-worded instructions to your heirs in your estate plan may help defuse that dynamic, but there’s no guarantee.

The second biggest reason for lost inheritance (25% of the time) is a failure to prepare children to responsibly manage a sudden windfall.  This comes as no surprise given the reluctance of many parents to discussing finances with their children, but this is a taboo that must be overcome.  When that happens, a number of potential solutions become available.

Until then, good luck and good hunting.



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The Fisher Law Office is known for its experience in estate planning, probate administration, asset protection, and business development. Annapolis attorney Randall D. Fisher has practiced for over 20 years, maintains the highest peer review rating for ethics (AV Preeminent) by Martindale-Hubbell, and is a sucker for long walks on the fairways.

Find out how to reach Randy via or find him at, on Twitter @thefisherlawoffice, or at

Note:  The Wall Street Journal neither approves nor endorses the content of this blog and the Fisher Law Office.

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