Spontaneous Family Wealth Discussions and Decisions Can Lead to Regrets, Finds Merrill Study

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The Merrill Center for Family Wealth™ has released a guide to help families have productive conversations about wealth. The guide aims to provide practical advice and strategies for families to navigate discussions around financial matters. It covers topics such as setting goals, managing conflicts, and creating a family legacy. The guide is available for free on the Merrill Center's website.

Merrill Center for Family Wealth™ publishes guide to productive family conversations about money and relationships

NEW YORK, Nov. 2, 2023 /PRNewswire/ -- Nearly four in five wealthy families have had unplanned discussions about wealth with 26% later regretting it, according to a new study published by the Merrill Center for Family Wealth™, a part of Merrill Private Wealth Management. The research found 33% of families increased family conversations about wealth since the Pandemic; however, many families dive in without a plan, process, or skills to make well-intended conversations productive. This can lead to unintended stress, potential family rifts and under-functioning heirs.

To better understand how families approach discussions about wealth and decisions around gifting money, distributing assets among heirs, managing shared assets, and preparing the rising generation to handle wealth, Merrill surveyed 270+ individuals from families with $50 million or more in assets. The report, Pulling back the curtain: Wealthy families open up about money, relationships and decision-making, offers insights from a rarely-studied demographic and provides valuable lessons and action steps for all families navigating the complexities of intergenerational wealth.

The survey found:

• 78% of families who recently had conversations about family wealth said the discussion came up spontaneously.
• 26% of those who have had these conversations said they regretted it after the fact.
• 48% say that financial decision-making is shared among two or more generations.
• 54% report that one of their biggest challenges when co-managing shared assets is limited governance, such as a lack of transparency or clarity about roles, responsibilities, and how decisions are made, by whom.
• Just 14% say that the technical complexity of co-managing shared assets is a top challenge, while the remaining 86% point to non-technical challenges like complex family dynamics and limited governance

"Our research pulls back the curtains on the intricacies of family wealth, a topic that still remains taboo in many circles," said Valerie Galinskaya, head of the Merrill Center for Family Wealth and principal author of a report on the study findings. "When families learn to navigate wealth together, starting with an intentional plan and thoughtful conversations, they can do great things and thrive."

Gifting and distributing assets: What could go wrong?
Beyond looking at how families make decisions and communicate about wealth, the study also explored practices around lifetime gifting and the distribution of estate assets.

The survey found:

• 83% of families provide some sort of ongoing support for adult children or other heirs, including 39% who provide recurring lifestyle support, such as payment of living expenses and repayment of debt or loans.
• 56% who make or plan to make financial gifts during their lifetime do so with an intent to share gifts equally among their children or other family recipients.
• 35% of those making lifetime gifts do so on a case-by-case basis, depending on the age and readiness of the recipient, their financial need, and how much time they have put into the family.

The Merrill Center for Family Wealth (the Center), a highly specialized group within Merrill Private Wealth Management, works closely with families to develop the skills and processes for more productive family wealth conversations and effective decision-making. In its report on the study findings, the Center provides recommended guidance based on years of experience facilitating family wealth discussions, particularly among families with substantial wealth, complex dynamics or circumstances.  

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 68 million consumer and small business clients with approximately 3,900 retail financial centers, approximately 15,000 ATMs and award-winning digital banking with approximately 57 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange. 

Investing involves risk. There is always the potential of losing money when you invest in securities.

Merrill, its affiliates and financial advisors do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp.").  MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of BofA Corp.

Merrill Private Wealth Management is a division of MLPF&S that offers a broad array of personalized wealth management products and services. Both brokerage and investment advisory services (including financial planning) are offered by the Private Wealth Advisors through MLPF&S. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill's obligations will differ among these services. Investments involve risk, including the possible loss of principal investment.

The banking, credit and trust services sold by the Private Wealth Advisors are offered by licensed banks and trust companies, including Bank of America, N.A., Member FDIC, and other affiliated banks.

Trust, fiduciary and investment management services, including assets managed by the Specialty Asset Management team, are provided by Bank of America, N.A., Member FDIC and wholly owned subsidiary of Bank of America Corporation ("BofA Corp."), and its agents.

Investment products:  

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May Lose Value

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Reporters May Contact:
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Phone: 1.646.855.3267
Julia.Ehrenfeld@bofa.com

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SOURCE Bank of America Corporation

FAQ

What is the Merrill Center for Family Wealth™?

The Merrill Center for Family Wealth™ is an organization that focuses on providing guidance and support to families in managing their wealth.

What does the guide published by the Merrill Center cover?

The guide covers various aspects of having productive family conversations about wealth, including goal-setting, conflict management, and creating a family legacy.

Where can I access the guide?

The guide is available for free on the Merrill Center for Family Wealth™'s website.

What is the purpose of the guide?

The guide aims to offer practical advice and strategies for families to effectively navigate discussions around financial matters.

Who can benefit from the guide?

The guide can be beneficial for families who want to have productive conversations about wealth and improve their financial decision-making.