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Financial Advisers Now Teach Rich Children to Manage Inheritances

Daryll Pomey Orat - Friday, February 20, 2015

Many financial advisors have begun to tap into a niche market - teaching children from rich families, how to manage their inheritance.

These services are being offered by firms, who are hiring out their services to clients who want their heirs to be educated on wealth management. Sometimes, those services are being hired by the heirs themselves.

Over the next 30 years, baby boomers are expected to leave their heirs approximately $30 trillion in assets. For many wealthy families, that choice often results in anxiety. It's a fact that wealth often tends to disappear with generations, and usually, is completely erased within a span of three generations. Parents want to avoid a situation like this, and therefore want expert advice. They are reaching out to financial advisors to teach their children about handling inheritances, and avoiding the pitfalls that come with a huge inheritance.

One way that families can try to reduce the risk that their heirs will use their wealth irresponsibly, is to transfer the assets into a trust. The provisions of the trust can be tailored to ensure that money is only released to your heirs at significant milestones.

For instance, you could arrange for assets to be transferred to your children at the age of 21, then again at the age of 25, 30 and so on. That ensures that the heirs receive the money in a staggered fashion, and during times when they are much more financially mature and able to make sensible decisions about money.

That does not completely eliminate the risk that your child will misuse his wealth, but it does reduce the likelihood that he will do so.

To learn about other ways to ensure that your wealth remains safe even as it is passed on to the next generation, speak with a California estate planning lawyer.


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