Are You Committing These Generational Wealth Transfer Errors?

It’s a story well-known to wealthy families: You’ve worked hard to build great wealth, and you’re willing to share it. But note the following statistics—70% of wealthy families lose their wealth by the second generation, and 90% by the third. That’s a staggering fact, and it doesn’t occur because the next generation spends wildly. More often, it’s a result of inadequate planning and insufficient communication.

Wealth transfer from one generation to the next is more than a will. It is having your legacy in place, your loved ones provided for, and your wishes clearly specified. Therefore, the question needs to be posed: Are you certain that your wealth will pass to the next generation smoothly? If a resounding “yes” is not the answer, perhaps the time has come to examine your plan.

At Heritage Capital, we specialize in financial planning for high-net-worth individuals. As a fee-only fiduciary advisor in Connecticut, we’re dedicated to helping families like yours avoid costly mistakes and tackle retirement and estate planning with clarity and confidence. The right strategy makes all the difference when retiring in Woodbridge or anywhere else in the state.

Common Mistakes in Generational Wealth Transfer

Avoid the following five mistakes to help ensure a smooth wealth transfer.

Mistake 1: Not Having a Well-Considered Plan

Families too often rely on a patchwork of documents and informal conversations. But more is required for a successful wealth transfer. A thorough written plan must include estate planning, tax planning, philanthropy, and long-term financial goals.

If you don’t have a plan, your estate may pay unnecessary taxes, cause confusion for your heirs, and even lead to lawsuits. Connecticut financial planning needs preparation and coordination of all aspects of your wealth.

Mistake 2: Ignoring Tax Implications

Wealth transfer is not a tax-neutral event. Estate taxes, capital gains taxes, and gift taxes can significantly reduce what you leave behind. That’s why planning with tax efficiency as your objective is critical.

Estate planning—whether through lifetime gifting, charitable trusts, or the creation of irrevocable structures—can reduce taxes significantly. Through our Connecticut financial planning services, we help you protect your long-term legacy.

Mistake 3: Not Communicating Enough with Heirs

Educating beneficiaries about financial matters encourages responsibility and trust. Wealth is values, not just money. Retirement planning for high-net-worth individuals must include conversations that bridge family dynamics with your estate goals.

Mistake 4: Failing to Update the Plan

Life evolves, and your plan should also evolve. Too many families create a wealth transfer plan and never review it again.

Births, deaths, weddings, divorces, and changes in tax laws all require updates. If your plan has not been reviewed in the last several years, it is likely to be out-of-date. Ongoing financial planning for high-net-worth individuals includes checking in periodically and updating accordingly.

Mistake 5: Not Safeguarding Assets

Wealth protection is just as important as wealth creation. Without proper protection, your wealth may be vulnerable to lawsuits, creditors, or financial mismanagement by future generations.

Tools like trusts, LLCs, and insurance can very efficiently safeguard your wealth. Active portfolio management strategies are also crucial in keeping your money safe with growth in perspective.

The Position of a Fiduciary Advisor

When you’re dealing with multi-generational wealth, it matters whom you do business with. A fiduciary advisor is legally and ethically obligated to act in your best interest—a distinction that sets us apart.

At Heritage Capital, our founder, Paul Schatz, holds the Accredited Investment Fiduciary® (AIF®) designation. Paul shares with his firm the knowledge provided by this designation, and it attests to both rigorous training and a firm commitment to upholding the highest standard of wealth management.

As a fee-only financial advisor in Connecticut, we provide objective and straightforward guidance. This kind of relationship builds trust and results for families navigating retirement planning for high-net-worth individuals.

Heritage Capital’s Generational Wealth Transfer Strategy

Our approach to wealth transfer planning includes the following:

• Estate and legacy planning
• Tax-efficient strategies 
• Investment management 
• Family governance and education

We develop an individualized plan with every client centered around their financial goals, family situation, and long-term objectives. If you wish to retire in Connecticut and build a lasting family legacy, let us help you create a plan that will endure for generations to come.

Protect Your Wealth

If you are concerned about your legacy, do not delay taking action. Schedule a consultation with Heritage Capital today. We will review your current plan—or develop one with you from scratch—and determine if there are any weaknesses that could threaten your wealth. 

As a fiduciary advisory practice led by an AIF®-designated advisor, we deliver the clarity, expertise, and one-on-one service that high-net-worth families need. With our assistance, you’ll avoid expensive mistakes and protect your family’s future for years to come.