THE LONG VIEW

Stephanie Hughes

Advisors can guide families through the complexities of inheritance with a proactive, structured approach.

The Vanderbilt family’ s decline in wealth serves as a cautionary tale of unchecked spending and a lack of financial stewardship.

HE LARGEST GENERATIONAL WEALTH TRANSFER IN HISTOry is underway, with trillions of dollars set to move from baby boomers to their heirs.

While the story of assets in flux has gotten a lot of attention in the media, the nuances of the great wealth transfer aren’ t often noticed. For instance, research compiled by Edward Jones suggests that baby boomers, instead of passing down most of their wealth, plan to transfer only about 40 % of their assets while they’ re alive. The firm also found that about 35 % of Americans overall don’ t plan on discussing their wealth transfer plans with their families.

Such choices can set the stage for misaligned expectations, strained relationships and missed planning opportunities.

The risks of poor planning are obvious. Consider the Vanderbilt family, whose decline in wealth serves as a cautionary tale of unchecked spending and a lack of financial stewardship. Family patriarch Cornelius Vanderbilt amassed an immense fortune through railroads and shipping in the 19th century, yet within a few generations, his wealth was nearly depleted after family members pursued extravagant lifestyles, suffered poor financial management and failed to follow structured wealth preservation strategies.

Contrast that with the Rockefeller family’ s disciplined approach to generational planning. Unlike the Vanderbilts, the Rockefellers implemented a robust framework for managing generational wealth— by establishing trusts and family offices and putting a strong emphasis on financial education. John D. Rockefeller instilled certain principles in family members, encouraging long-term investment, philanthropy and governance, to ensure that his future generations remained responsible stewards of their fortune.

As a result, while the Vanderbilt name became synonymous with lost wealth, the Rockefellers maintained and even grew their fortune over time, demonstrating that structured planning, disciplined financial management and education are key to sustaining it.

The Advisor’ s Role

For these reasons, financial advisors have an important role to play in family wealth transfer— and the opportunity lies in guiding families through the complexities of this process with a proactive, structured approach. This means advisors must go beyond the technical skills they usually bring to bear and often step into the roles of mediator, educator and strategic planner.

Many families assume passing down wealth is straightforward. They draft wills, set up trusts and believe the rest will fall into place. But wealth transfers are about more than just legal documents— they require clear communication, thoughtful governance and a deep understanding of family dynamics.

One of the biggest challenges is the philosophical disconnect between generations. Baby boomers, who built their wealth through decades of disciplined

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