Israelis – Don’t Leave Intergenerational Wealth transfer to Chance

From my experience servicing over 140 high net worth clients in Israel, I can say that there is usually a communications gap between parents and their adult children when it comes to family assets. Parents as a rule do not share family wealth information with their children, it is practically taboo.
Proper wealth transfer should be planned and implemented years ahead and should combine three elements:

1. Understanding needs. Adult children should have knowledge of the parents’ present and future cash flow needs, based on the parents' financial goals and the full assets inventory.
   This will enable the children to understand how much wealth their parents have and how much they actually need.
2.  Coordinating expectations. Once the cash flow needs have been revealed to the children and both parents and children are aware of the financial situation, there should be frank discussions about the children's present and future needs, both financial and non-financial, with special consideration about the division of assets in case of divorce.
   This phase is very important for the children. They need to understand both their current and future financial position and try to plan accordingly with the parents’ assistance.
3.  Regular meeting between the children and the family wealth manager/family office. These meetings, when planned properly, can greatly contribute to a smooth distribution of  wealth:
   1. Upon the passing of their parents, the children will know exactly whom to turn to help them manage their inherited wealth. There is a continuity with the family's financial advisor.
   2. Wealth distribution can be easier since the advisor already knows exactly what assets exist and where they are held.
   3. Sometimes, the parents want to continue a legacy that they initiated while they were living. Their lifelong financial advisor who worked with them could be of benefit when this legacy needs to be continued by the children, after the parents are deceased.
   4. The introduction of financial education to the children by a trusted professional who can relay the financial viewpoints of the parents to the children that are compatible with the parents' wishes. In only one of three high net worth households will the assets suffice for more than one generation. Will you beat the odds?