Savant Wealth Management
By Laura K. Chiesman
November 4th, 2024
Some events in life have unexpected effects. Inheriting a large sum of money can be like that. It sounds good, but it is often riddled with conflicting emotions…
Inherited wealth is increasingly at risk as it moves through the generations. Approximately 35% of inheritances are gone within two years, leaving the heirs back where they started or possibly even worse off. Even more startling, 70% of wealthy families lose their wealth by the second generation and 90% by the third, according to the Williams Group wealth consultancy.
While there are many compelling stories about inherited wealth quickly lost through over-the-top spending and gifting, vulnerability to fraud, and bad business deals, the opposite can also happen. Some heirs are frozen into inaction by anxiety. They feel uncertainty, fear, and often guilt about this new wealth.
Some of the roadblocks to moving forward and having peace of mind regarding inherited assets are:
- Feelings of loss and grief.
- Conflict with other heirs.
- Isolation due to inability or fear of sharing this development with others.
- Guilt over suddenly having unearned wealth.
- Imposter syndrome – “Who am I to have all this, and what will I do with it?”
- Sadness over the perception that those who left the wealth could have used these assets for a better quality of life.
- Attachment to long-held, undiversified portfolio holdings, sometimes treating individual stock positions like a photo album.
Since the death of a loved one is often the source of inherited wealth, grief is a significant part of the process.
Knowing what to expect and understanding that you may go through these emotional phases is a good start. In your own time, you can consider how this newfound wealth will impact your life and how it can support your goals and vision. These assets are now yours and can positively impact you and others. Envisioning this new future and designing a coordinated plan around your goals will be time well spent.
