First Republic’s Alan Zafran discusses talking to heirs about their inheritance and some basic approaches to managing it.[su_spacer]

Talking to your children about their inheritance does not come easily. It’s common for parents to worry that the knowledge of a future windfall will zap a child’s ambition. But by staying quiet because of their desire to raise financially independent and responsible children, parents risk the opposite result: an unprepared heir who squanders the money. Indeed, 70 percent of wealthy families lose their wealth by the second generation, and a stunning 90 percent by the third, according to The Williams Group wealth consultancy.

This means that talking to your children about their inheritance and preparing them for the responsibility that comes with acquiring family assets — from cash and stocks to real estate, artwork and jewelry that can also have sentimental value — is vital to their future.

Unfortunately, many people don’t have these conversations with their heirs. An April 2017 survey by First Republic and Ipsos found that while 82 percent of respondents felt comfortable talking generally about money with their children, 42 percent had told their heirs (children, spouses or other loved ones) nothing about their inheritance, and only 29 percent had discussed specifics with their inheritors.[su_spacer]

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