FA-IQ reached out to advisors to ask: What are the common wealth transfer mistakes families make?

Jim Pratt-Heaney, founding partner of Coastal Bridge Advisors. Westport, Connecticut-based Pratt-Heaney has been in the industry for more than 30 years and has $2.85 billion in client assets.

“The primary mistake is not having a detailed financial plan, including all the ‘what-ifs’ that are important to the family.

Jim Pratt-Heaney
Most do not have the appropriate level of planning to refine optimal investing, spending, gifting or savings. Many only envision optimistic outcomes for their investments. And yet, others are too cautious; they may implement annuities or bonds in what feels like a simple solution, but they rarely maintain their spending power due to inflation. These products can sell well but are not a replacement for a sound financial plan and asset allocation-based investing.

Also, some parents focus too much on passing money to the kids and grandkids and do not plan enough for themselves. Not sharing their plan with those who will ultimately receive the funds is misguided. Communicating legacy and intergenerational responsibilities for wealth, based on sound financial planning, remains imperative.”

Gerald Goldberg, chief executive officer and co-founder of GYL Financial Synergies. West Hartford, Connecticut-based Goldberg has been in the industry for 26 years and has about $9 billion in client assets.

Gerald Goldberg
“People don’t plan to fail but it is not uncommon for them to fail to plan. Examples of this include the following:

  • Not having a proper and up-to-date estate plan in place;
  • Failing to communicate a plan with future generations;
  • Failing to update beneficiary designations and
  • Failing to fully utilize estate exemptions.”

Jack Petersen, managing partner, co-founder and advisor at Summit Trail Advisors. New York City-based Petersen has been in the industry for 30 years and his firm has $14.7 billion in client assets.

Jack Petersen
“The most common wealth transfer mistake that we see is not being thoughtful of future estate growth and liquidity, and what actually happens when someone passes with improper planning. The plan may look good on paper but future growth and sufficient liquidity need to also be properly planned for or the plan will not function as designed.”

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