It Doesn't All Stay in the Family
I got into estate planning law after experiencing first-hand (with family and friends) what can happen to an inheritance without proper estate planning. Homes are sold at fire-sale prices to pay for estate taxes, family assets get tied up in endless probates, and all that accumulated wealth people worked so hard to build begins to disappear--all because there was either inadequate or no planning in place. And in most cases a lot of that headache and stress would have been avoided with some proper planning and knowledge of law.
So if many people don't know how to do this the right way, then at least the high-net worth family owned businesses in America--they must know and certainly do proper planning, right?
Well apparently not. An article in Conde Nest Portfolio cites "a recent study of 242 family businesses owned by ultra high-net-worth individuals commissioned by U.S. Trust, Bank of America Private Wealth Management shows that despite professing dedication to preserving wealth, these companies are not doing the planning--estate, succession, asset protection--to achieve it."
"Only 15 percent of the companies studied stay under the control of their founding families past the second generation" ONLY 15 PERCENT. Another interesting point in the article that exemplifies the idea: "Do as I say not as I do" is that "Two-thirds of these uber-rich business owners want to keep it in the family and have a succession plan. Only one-third of those plans are being implemented, and most of them are out of date." If they are out of date, then they might fail, quite spectacularly too. Russ Alan Prince a co-author of the study is quoted as follows: "They're too busy making money to protect the money they're making."
The reality is that laws are tricky and many people are scared to ask lawyers what to do. Sometimes they are scared of the price an attorney might ask. In reality, many attorneys will offer a free consultation, review your situation and give you options. And the price of estate planning work needed (before problems occur) is generally a fraction of what probate and estate taxes might be (for those that have estate tax issues). Sometimes people are not even aware of any tax implications, and if you don't know what you don't know, how can you even ask the right questions?
