Without a Plan, Family Wealth Discussions Can Be Stressful: Survey

Wealth is a taboo topic in most circles, leaving many wealthy families and individuals feeling isolated and ill-equipped to manage the responsibilities that come with it. 

A new survey from the Merrill Center for Family Wealth found that a third of families engaged in increased discussions about their wealth since the pandemic. But many families go into these conversations without a plan, a process or the skills to make the conversations productive, which can lead to unintended stress, family rifts and under-functioning heirs, according to the study.

Merrill conducted the survey in partnership with Bank of America Merrill Lynch Analytics, Modeling & Information between November 2020 and July 2023 among 277 individuals who identified themselves as wealth creators and family members from the second, third and fourth generations, as well as spouses/partners/in-laws and others. Individual families of respondents have $50 million or more in net worth. 

Seventy-eight percent of participant families who had recently had conversations about family wealth said the discussion came up spontaneously. Twenty-six percent said they regretted it afterward.

Forty-eight percent of respondents said financial decision-making is shared among two or more generations. More than half reported that a major challenge when co-managing shared assets is limited governance, such as lack of transparency or clarity about roles and responsibilities, and how decisions are made and by whom.

Just 14% said that the technical complexity of co-managing shared assets is a top challenge, while the remaining 86% pointed to non-technical challenges, such as complex family dynamics and limited governance.