CNBC reports that wealthy families are avoiding tough conversations about when aging parents should relinquish control. Advisors and lawyers confirmed that relatively few families address this question. The issue is succession planning for family wealth.
The revelation here is that rich people also get old. Revolutionary stuff. Apparently nobody in these families thought to mention that Dad, who made his fortune in 1987, might not have the sharpest mind at eighty-three. The advisors are shocked. The lawyers are concerned. The adult children are paralyzed by the complexity of asking if maybe, just maybe, Mom should stop running the private equity fund.
This is the same demographic that pays consultants six figures to optimize their portfolio rebalancing. They hire specialists to manage their art collections. They have lawyers for their lawyers. But broaching the topic of mortality with a parent? Too difficult. Better to wait until Dad signs over the estate to a Nigerian prince in an email scam.
The families are worried about a succession crisis. Not worried enough to actually plan for succession, mind you. Just worried enough to tell CNBC about being worried. The advisors suggest having these conversations early. The families nod thoughtfully and do nothing. The cycle continues.
Meanwhile your retail portfolio is down another eight percent because you bought shares of a company whose CEO you saw on a podcast. You don't have to worry about succession planning. You have to worry about succession planning your shift at Wendy's around your margin calls.
The wealth gap in America isn't just about money. It's about problems. Rich people get to agonize over whether Father's cognitive decline means he shouldn't control the family office anymore. You get to agonize over whether the discount tire place is lying about your brake pads.
At least when your parents lose their minds, the only thing at stake is who gets the china cabinet.
Photo by Artyom Kabajev on Unsplash
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