Successful wealth transfers may not be defined solely by what is passed on, but how future generations are equipped to face stewardship.
Recent research into women and wealth raises an interesting question: how much attention do families devote to equipping future generations for inheritance, rather than simply preparing the assets that will be inherited?
Succession planning discussions often focus on structures, tax considerations, governance arrangements, and the preservation of wealth. These are all important. However, they address only one side of the equation. The other concerns the people who will eventually assume responsibility for those assets.
It is tempting to view wealth transfer as a financial event. In reality, it is often an emotional, practical, and governance challenge. The transfer frequently coincides with significant life events, whether the death of a parent, the loss of a spouse, the sale of a family business, or retirement after decades of wealth creation. Alongside those assets come responsibilities, expectations, and decisions that may not previously have been encountered.
Recent research published by UBS helps illustrate the point. The study found that almost one-third of women who inherited assets from their parents had never discussed the transfer beforehand, whilst four in ten inherited without any wealth transfer or estate plan being in place.
These findings suggest that many families devote considerable effort to organising the transfer of assets whilst giving less attention to preparing the people who will inherit them.
Wealth transfer is about more than assets
Much has been written about the Great Wealth Transfer. UBS estimates that approximately US$105 trillion is expected to change hands by 2045, creating one of the largest intergenerational transfers of wealth in history.
For many families, wealth transfer is not simply about ownership. It is about stewardship.
Inherited wealth can provide security, opportunity, and freedom. It can support entrepreneurship, philanthropy, education, and long-term family objectives. Equally, it can create duties that previous generations may have spent decades learning to navigate.
The challenge is therefore not simply ensuring wealth reaches the next generation. It is ensuring future generations are prepared and ready for the decisions and obligations that accompany it.
Preparing people, not just plans
One of the most revealing aspects of UBS's Own Your Worth research, which surveyed 2,000 women investors with at least US$1 million in investable assets, is that those who had already experienced a wealth transfer were asked what advice they would offer to future inheritors.
Their recommendations were practical and focused less on investment performance than on understanding, preparation, and stewardship.
Among those surveyed:
- 90% said it is important to understand the size and components of an inheritance.
- 87% recommended understanding potential tax consequences.
- 80% recommended understanding available investment options and strategies.
The communication gap
The findings also reinforce the broader point that communication is often viewed as a soft issue within succession planning, yet it may be one of the most important elements of a successful transition.
Financial plans may be carefully constructed. Legal documents may be drafted and structures established. Yet conversations about expectations, family values, and long-term objectives are sometimes delayed or avoided altogether.
Communication may not eliminate every challenge, but it can reduce uncertainty, improve understanding, and help align expectations.
The importance of continuity
Many wealth transfers do not happen at a single point in time. Stewardship is often transferred gradually through years of observation, involvement, discussion, and experience.
This principle is particularly relevant in family businesses.
Family-owned enterprises contribute more than 70 per cent of global GDP and account for approximately 60 per cent of worldwide employment. Yet despite their significance, relatively few survive beyond the founding generation. Only around 30 per cent transition successfully to a second generation, 12 per cent to a third, and just three per cent to a fourth and beyond.
This is one reason why many successful families place emphasis on communication and governance. Some hold regular family meetings. Others involve younger family members in discussions regarding businesses, investments, philanthropy, or decision-making. Some establish family charters or similar governance frameworks that articulate beliefs, roles, and intentions.
Whilst terminology varies, the principles are not new. Prominent business-owning families, including the Waltons, Mars, Hermès, Rockefellers, and Rothschilds, are often cited as examples of families who adopted formal governance approaches to support generational continuity.
Stewardship and purpose
The concept of stewardship sits at the centre of these discussions.
Wealth is rarely accumulated without purpose. It may take the form of a business, an estate, land, a property portfolio, an art collection, a philanthropic foundation, or investments built over many decades.
Whatever form it takes, those assets often represent far more than their financial value.
They may embody a family's history, ethics, aspirations, and sense of identity. In many cases, they also reflect the efforts and decisions of previous generations.
Some families prepare future generations gradually through involvement rather than instruction. Estée Lauder heiress Aerin Lauder, for example, spent decades working within the family business before establishing her own brand. Her experience illustrates how familiarity, confidence, and understanding can develop over time through participation rather than through a single transfer of ownership.
A similar principle can be seen in the approach adopted by some owners of estates and family enterprises. In an interview on inheritance and succession planning with Julius Baer, Earl Spencer spoke about involving younger family members in the life of their estate long before responsibility formally transfers.
Not every family has a global business empire or family seat. However, the principle remains relevant. Understanding is rarely transferred in a single conversation. It develops over time through observation, involvement, and experience.
Looking beyond the great wealth transfer
The lessons emerging from recent women and wealth research are not solely relevant to women. They have implications for any family considering its future.
These findings also serve as a reminder that wealth transfer is rarely a single event. More often, it is a process that unfolds over many years, shaped by family relationships, shared objectives, and the gradual transfer of stewardship from one generation to the next.
Ultimately, successful wealth transfers may not be defined solely by what is passed on, but by whether future generations are equipped to steward those assets with confidence, understanding, purpose, and a clear appreciation of the responsibilities that accompany ownership.
This briefing is provided for general information only and does not constitute legal, tax or financial advice. Professional advice should always be obtained before acting on any of the information provided.
