Conventional estate planning continues to provide us with important insights into human behaviour. A recurring observation by professionals working in the estate planning field is that unearned gifts, inheritances, and money quickly evaporate. It is estimated that 70% of the accumulated wealth of affluent families will be lost by the next generation, and 90% of it will be lost by the generation after that. While these are unsettling statistics, there are countless stories of fortunes, wealth, and lives lost as a direct result of an inheritance. Being mindful of these statistics during the estate planning process is imperative if you want to ensure that your estate doesn’t disappear as soon as you’re gone.
People often scoff at the mention of a lottery winner who spends it all and then wishes that they’d never won it in the first place. “How does that happen?” we ask indignantly. The answer is, the money was not earned so it had no value to the winner. And we see the same results with inheritances.
Something for nothing becomes nothing.
Conventional estate planning does not work, and I believe it may actually weaken our communities. Thankfully, there is an alternative. It involves an ongoing journey of imbuing any potential inheritance with purpose and responsibility. It involves planning that is focused on passing on values and principles, rather than just ‘stuff.’ Your beneficiaries should know what they are supposed to do with the money you give them and why that matters to you!
It’s a harsh truth because it’s actually pretty easy to pass along ‘stuff’ after you die, but we also see how easy it is for it to disappear. Being purposeful about inheritance requires careful thought and consideration that results in the creation of a much more meaningful and positive influence over the next generations. It goes a long way to stop a disappearing inheritance.
The existing approach to estate planning will only perpetuate loss. If purpose, meaning, and positivity resonate with you, you must seek an alternative. The good news is, it exists.