Financial Planning

Sep 07, 2023

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Study reveals UHNW fears in estate planning

While most Americans worry about having enough to leave behind, a new study finds that the ultrarich fear leaving too much behind and feeding “trust fund monsters.”

 

Estate planning wealthtech firm Vanilla, which is backed by investors including Michael Jordan, published a report on Thursday that dives into the motivations and fears driving Americans at all wealth levels in legacy planning. The report examines attitudes and behaviors in Americans with less affluence, reporting under $1 million of household net worth, as well as those in the high net worth and ultrahigh net worth spheres.

 

Overall, respondents said they felt the most damaging result of a poor estate plan strategy was “leaving loved ones without enough capital,” with 31% identifying that as a top fear. Some 27% said their biggest concern was “sparking conflict among heirs.”

 

However, among the ultrarich — for the purposes of this study, those with at least $25 million of net household worth — the biggest fear was in fact creating “trust fund monsters”: entitled children who would waste the family wealth. In fact, UHNW respondents were five times more likely to be concerned about spoiling their heirs than about hitting heirs with inheritance taxes — and they were much more likely than others to cite family conflict as the top reason driving them to review an estate plan.

 

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Read the full article here: Study reveals UHNW fears in estate planning

[Victoria Zhuang, Financial Planning]