How Estate Planning Can Thwart the ‘Third-Generation Curse’

Thorough communication with heirs about values and various elements of your estate plan could help younger generations better manage their inherited wealth.

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(Image credit: Getty Images)

We are currently in the midst of what is being coined as the Great Wealth Transfer — a time during which Baby Boomers are projected to pass trillions to their heirs. Of the $84 trillion anticipated to be inherited by Gen X, Millennial and Gen Z heirs through 2045, $16 trillion will be transferred within the next decade, according to Cerulli Associates.

While these numbers seem staggering, there actually may not be much for younger generations to inherit because of the so-called third-generation curse — when wealth accumulated by one generation is lost by the third generation as a result of mismanagement and imprudent spending.

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Nicole Jackson-Leslie, JD, 21/64 Certified Advisor
Managing Director, Senior Wealth Planner, Brown Brothers Harriman

Nicole Jackson-Leslie provides guidance to high-net-worth families and individuals throughout all aspects of their estate planning, including generational transfer of family wealth, business succession, philanthropy, next-generation education and tax minimization. Prior to joining the firm in 2018, she practiced at the law firm of Choate, Hall & Stewart LLP in Boston.