The essence of successful wealth transfer lies not in dividing assets, but in uniting the family. As Bernard Goffaux, head of estate planning at Banque de Luxembourg, puts it: “a good asset transfer should bring the family together, not divide it.” Unlike traditional financial planning, which focusses solely on numbers, the bank adopts a holistic approach, addressing family dynamics, open communication and generational preparedness.

One of the most notable changes in the dynamics of wealth transfer is the increasing age of heirs. Contrary to the traditional image of young inheritors, the average age of heirs in Europe has risen to around 50. This shift is largely due to increased life expectancy, which has delayed the transfer of wealth as baby boomers live longer and retain control of their assets well into their later years. This phenomenon, often referred to as “Prince Charles Syndrome,” highlights the unique challenges faced by heirs who are often in their mid-adulthood, with established careers and families of their own.

Honora Ducatillon, head of family advisory at Pictet Wealth Management, explains: “a common myth is that heirs are always young. In reality, many heirs are in their 50s or older, which changes the dynamics of wealth transfer significantly.” This demographic shift necessitates a more nuanced approach to estate planning, one that considers the specific needs and circumstances of older heirs who may already have substantial financial responsibilities and commitments.

Holistic approaches to estate planning

Private banks like Banque de Luxembourg are at the forefront of developing holistic approaches to wealth transfer, focussing on family unity and comprehensive financial education. Goffaux advocates for regular family meetings to discuss estate plans, ensuring that they evolve in line with changing family dynamics and regulatory frameworks. “Estate planning must be flexible and adaptable,” he explains. “It’s not a one-time event but an ongoing process that requires constant review and adjustment.” By fostering open communication and involving all family members, private banks aim to create a cohesive environment where wealth transfer is seen as a collective responsibility rather than an individual burden.

Educating the next generation

Financial education is a cornerstone of successful wealth transfer. Many inheritors, particularly those who did not grow up managing wealth, lack the knowledge needed to make informed financial decisions. To address this gap, Banque de Luxembourg has introduced programmes like the “Summer Academy” and the “Family Business Junior Executive Programme,” designed to equip young inheritors with essential financial management skills.

Stephanie Baldinucci, Luxembourg market coordinator at Banque de Luxembourg, underscores the importance of early involvement: “including next generations in heritage discussions helps to strengthen their understanding of the strategic choices that will structure their future.” Through these initiatives, the bank aims to ensure that inheritors are not just recipients of wealth but stewards capable of sustaining and growing it.

Baldinucci further elaborates on the bank’s commitment to financial education: “faced with the growing complexity of heritage issues, financial education is essential to enable the next generation to navigate with confidence.” To this end, Banque de Luxembourg has launched its first masterclass, “Boost your investing skills,” aimed at providing young inheritors with the tools and knowledge they need to succeed in wealth management.

Managing family dynamics and conflicts

Intergenerational wealth transfer is fraught with complex family dynamics, which can lead to conflicts if not managed properly. Ducatillon advises families to establish clear operating principles and encourage open communication. “It is crucial to define what success means for the family and ensure that all members are aligned with this vision,” she says. By setting clear expectations and fostering a shared understanding of roles and responsibilities, families can minimise conflicts and create an environment conducive to successful wealth transfer.

Families must be willing to adjust their plans based on feedback and evolving circumstances.

Honora Ducatillon, head of family advisory, Pictet Wealth Management

Conflict resolution is another critical aspect of wealth transfer. Ducatillon emphasises the importance of normalising disagreements and viewing them as part of an iterative process. “Families must be willing to adjust their plans based on feedback and evolving circumstances,” she explains. By embracing a flexible and adaptive approach, families can navigate the complexities of wealth transfer more effectively.

The role of governance and transparency

In an era of increased transparency, strong governance structures are essential for managing wealth transfer professionally and discreetly. High-profile families, in particular, must navigate the risks associated with public disputes, which can affect both their reputations and businesses. Establishing robust governance frameworks ensures that succession planning is handled with minimal disruption, preserving family legacies and business continuity.

Globalisation further complicates wealth management, as families must contend with diverse regulatory and cultural landscapes. By adopting a proactive approach to risk management and ensuring that heirs are equipped with the necessary skills, families can position themselves to thrive in an increasingly interconnected world.

Preparing for the future: best practices for wealth transfer

As families prepare for the Great Wealth Transfer, experts recommend starting early, fostering open communication and defining clear roles and expectations. “I would suggest starting early, communicating openly and clearly defining each person’s roles and expectations,” Ducatillon advises. By involving all family members in the planning process and encouraging open dialogue, families can create a solid foundation for successful wealth transfer.

Marie-Gaëlle Lefebvre, a wealth management advisor based in London, echoes this sentiment, emphasising the importance of proactive planning. “By the time you reach your 40s, you should already be thinking about estate planning,” she says. “Planning ahead allows for better anticipation and helps avoid problems.” Lefebvre also stresses the importance of asking the right questions and addressing concerns openly. “All my clients start their first meeting by saying, ‘I don’t know anything about this.’ So, we sit down, lay everything out on the table and conduct a financial review. But the most important thing is that there are no stupid questions.”

The importance of financial literacy

Financial literacy plays a crucial role in ensuring that wealth is managed effectively across generations. Educated heirs are more likely to approach wealth management with confidence and a sense of responsibility, minimising uncertainty and potential disagreements. By providing comprehensive financial education, private banks and wealth advisors empower inheritors to make informed decisions and navigate the complexities of wealth management with ease.

Cultural and legal differences play a significant role in wealth transfer dynamics. In some countries, heirs have specific legal rights, while in others there is greater freedom in distributing wealth. Additionally, the wealth creation cycle in a given country can influence how families approach wealth transfer. For instance, in Asia, where wealth is often more recently acquired, families may seek benchmarks and guidance to navigate the complexities of wealth management.

Globalisation presents both opportunities and challenges for families engaged in wealth transfer. On one hand, it offers the potential for diversified investments and exposure to new markets. On the other hand, it requires families to navigate different regulatory and cultural environments, as well as manage the risks associated with geographic diversification. By adopting a proactive approach to risk management and ensuring that heirs are equipped with the necessary skills, families can position themselves to thrive in an increasingly interconnected world.

The role of external advisors

External advisors play a crucial role in guiding families through the complexities of wealth transfer. They offer an objective perspective and provide legal, financial and strategic advice tailored to each family’s needs. Advisors can also facilitate family discussions, help resolve conflicts constructively and assist in establishing strong governance structures. By leveraging the expertise of external advisors, families can navigate the challenges of wealth transfer more effectively and ensure that their wealth is preserved and grows over time.

In today’s digital age, technology plays an increasingly important role in wealth management. Financial institutions are leveraging advanced analytics, artificial intelligence and digital platforms to provide more personalised and efficient services. These technological advancements not only streamline wealth management processes but also offer new tools for financial education and risk management. By embracing innovation, families can stay ahead of the curve and adapt to the evolving landscape of wealth management.

As younger generations take the reins of family wealth, there is a growing emphasis on sustainable investing and impact philanthropy. Millennials and Gen Z inheritors are increasingly interested in aligning their investments with their values, focusing on environmental, social and governance (ESG) criteria. This shift towards responsible investing not only reflects the changing priorities of younger generations but also presents an opportunity for families to create a lasting positive impact through their wealth.

The psychological aspect of wealth transfer

Beyond the financial and legal considerations, wealth transfer also involves significant psychological and emotional dimensions. The process can bring up complex feelings about identity, responsibility and family legacy. Advisors often work with families to address these emotional aspects, helping them navigate the psychological challenges that can arise during wealth transfer. This holistic approach ensures that families are not only financially prepared but also emotionally equipped to handle the responsibilities that come with inheriting wealth.

The Great Wealth Transfer represents a historic shift that will reshape financial markets, real estate and philanthropy. As families prepare for this transition, it is essential to start early, communicate openly and establish strong governance structures. By integrating financial education, structured governance and intergenerational dialogue, private banks and wealth advisors are ensuring that wealth is preserved and continues to create value for generations to come.

As the baby boomer generation passes the torch to their heirs, families and advisors must remain proactive, adaptable and committed to fostering a culture of financial stewardship. Those who navigate this transition thoughtfully will be best positioned to benefit from this historic shift, ensuring that wealth not only transfers but endures.

The Great Wealth Transfer

The Great Wealth Transfer is the largest intergenerational shift of wealth in history, as baby boomers (born 1946-1964) pass down their assets to younger generations. Over the next 20 to 30 years, an estimated $30trn to $84trn will be inherited by Gen X, Millennials and Gen Z in the US alone.

Baby boomers have accumulated significant wealth through homeownership, stocks, retirement accounts and businesses. As they age, this wealth will transfer to heirs, charities and institutions. However, this shift is not evenly distributed: while wealthier families will inherit substantial assets, many lower-income boomers have little to pass down. 

This massive transfer will reshape financial markets, real estate and philanthropy. Many Millennials and Gen Zers may use inherited funds to buy homes, invest in sustainable industries or pay off debts. However, wealth concentration may continue, as high-net-worth families receive the largest inheritances.

Additionally, estate taxes, healthcare costs and financial mismanagement could reduce the amount heirs actually receive. Proper estate planning is crucial to ensure wealth is passed efficiently.

Younger generations must prioritise financial literacy to manage and grow inherited wealth wisely. Estate planning tools such as trusts, wills and tax-efficient strategies will be essential for boomers to secure their legacy. The Great Wealth Transfer is not just a financial event, it’s a societal transformation that will shape economies for decades.

Lessons from fiction

As families and advisors navigate the complex landscape of succession, the popular TV show “Succession” offers a dramatic, tale of what can go wrong when succession planning is mishandled. In the realm of wealth management, education is paramount. Advisors emphasise the importance of equipping inheritors with the necessary skills to manage their future responsibilities effectively. This includes not only technical financial knowledge but also soft skills like communication and decision-making.

In contrast, “Succession” portrays a family where the lack of structured education and preparation leads to chaos. The Roy family’s struggles highlight the importance of a well-thought-out plan that includes clear communication and a shared understanding of roles and responsibilities.

This article was written for the to the  of Paperjam magazine, published on 26 March. The content is produced exclusively for the magazine. It is published on the site to contribute to the full Paperjam archive. .

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