NEW YORK, NY – Nearly four in five wealthy families have had unplanned discussions about wealth with 26% later regretting it, according to a new study published by the Merrill Center for Family Wealth™, a part of Merrill Private Wealth Management. The research found 33% of families increased family conversations about wealth since the Pandemic; however, many families dive in without a plan, process, or skills to make well-intended conversations productive. This can lead to unintended stress, potential family rifts and under-functioning heirs.

To better understand how families approach discussions about wealth and decisions around gifting money, distributing assets among heirs, managing shared assets, and preparing the rising generation to handle wealth, Merrill surveyed 270+ individuals from families with $50 million or more in assets. The report, Pulling back the curtain: Wealthy families open up about money, relationships and decision-making, offers insights from a rarely-studied demographic and provides valuable lessons and action steps for all families navigating the complexities of intergenerational wealth.

The survey found:

• 78% of families who recently had conversations about family wealth said the discussion came up spontaneously.
• 26% of those who have had these conversations said they regretted it after the fact.
• 48% say that financial decision-making is shared among two or more generations.
• 54% report that one of their biggest challenges when co-managing shared assets is limited governance, such as a lack of transparency or clarity about roles, responsibilities, and how decisions are made, by whom.
• Just 14% say that the technical complexity of co-managing shared assets is a top challenge, while the remaining 86% point to non-technical challenges like complex family dynamics and limited governance

“Our research pulls back the curtains on the intricacies of family wealth, a topic that still remains taboo in many circles,” said Valerie Galinskaya, head of the Merrill Center for Family Wealth and principal author of a report on the study findings. “When families learn to navigate wealth together, starting with an intentional plan and thoughtful conversations, they can do great things and thrive.”

Gifting and distributing assets: What could go wrong?

Beyond looking at how families make decisions and communicate about wealth, the study also explored practices around lifetime gifting and the distribution of estate assets.

The survey found:

• 83% of families provide some sort of ongoing support for adult children or other heirs, including 39% who provide recurring lifestyle support, such as payment of living expenses and repayment of debt or loans.
• 56% who make or plan to make financial gifts during their lifetime do so with an intent to share gifts equally among their children or other family recipients.
  
• 35% of those making lifetime gifts do so on a case-by-case basis, depending on the age and readiness of the recipient, their financial need, and how much time they have put into the family.

The Merrill Center for Family Wealth (the Center), a highly specialized group within Merrill Private Wealth Management, works closely with families to develop the skills and processes for more productive family wealth conversations and effective decision-making. In its report on the study findings, the Center provides recommended guidance based on years of experience facilitating family wealth discussions, particularly among families with substantial wealth, complex dynamics or circumstances.   

Bank of America

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Julia Ehrenfeld, Bank of America
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Julia.Ehrenfeld@bofa.com

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