Nearly half of affluent Americans are reluctant to talk about inheritance plans with their successors, according to new research, despite the fact avoiding the subject means heirs are almost twice as likely to disagree about inheritance distribution.
According to research by UBS Wealth Management, parents and benefactors were reluctant to broach the topic because 43% believed it was not a pressing issue, while 32% said they were concerned their children would become reliant on the family’s wealth.
Successors, on the other hand, chose not to break the silence because the majority (46%) felt that their families did not discuss financial issues.
In total the survey found 46% of high net worth US investors chose not to discuss succession plans with their children.
The findings suggested an open conversation, particularly over the wealth’s size and how it will be divided, could reduce the chance of a disagreement among beneficiaries after the benefactor’s death by 44%.
“Inheritance can be a complex and sensitive issue for both sides,” said Paula Polito, client strategy officer at UBS. “Parents don’t want to talk about morality and children don’t want to appear greedy.”
Most benefactors hoped to pass on their wealth while they were still living, with financial needs (51%) and the desire to see their children succeed (47%) ranking as the reasons.
The study shows that the next generation appears to be wising up to open discussion with their children with 72% of respondents saying they planned to deal with inheritance differently from their parents.
“Each generation feels like they know more than the one that preceded them,” Sameer Aurora, head of investor insights at UBS, said. “The next generation are demonstrating a greater transparency with their own heirs and are planning for inheritance earlier.”