Family and Finances: Start the Dialogue
Family communication, education, and understanding are just a few of the components that can add to the success or failure of managing family money. Here are some of the steps you can take to deal more effectively with family finances.
Inheritance: Avoid the “Three-and-Out” Dilemma
There are many complexities involved in how money is transferred between generations. In many cases, inheritance encompasses the tiny details that can make the difference between keeping your money in the family and losing it to spending blunders, investment errors, and costly tax consequences. Some studies indicate that a family’s wealth is usually dissipated within about three generations—the thinking being that the first generation earns the money while the second generation gets to enjoy it. Because the second generation didn’t earn the money, they may have less respect for how to handle it. By the third generation, family members have no concept of the discipline needed to earn the money and may have no financial management skills at all.
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