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By Megan Helzner, Principal, CFAR
As 76 million Baby Boomers prepare for retirement, there will be an enormous transfer of wealth to Gen X, Millennials, and Gen Z. According to estimates by Merrill Lynch, what is commonly referred to as The Great Wealth Transfer means that more than $80 trillion in assets will shift from Boomers to the next generations over the next two decades.
This demographic reality (see Figure 1) has enormous implications for family businesses and family enterprises (including family offices and family foundations) writ large. If an unprecedented amount of wealth—in the form of liquid assets, shared investments, shared philanthropic commitments, or family enterprises—is to be transferred, it is vitally important to consider how to effectively shift ownership, control, decision-making, and management from one generation to the next in a way that drives value and preserves family harmony. While families could simply shift ownership and decision-making, the longevity and health of the enterprise are at risk without meaningful engagement and development of the next generation over time.
In our view at CFAR, engaging the next generation is never a “one-and-done” process between two people (imagine Dad and Daughter) or two parties (imagine Leading Generation and Next Generation). Rather, engagement is an artful dance. It requires a systemic approach that focuses on how family inside the enterprise and outside, non-family leaders (if they exist in your system), and trusted advisors can help.
About CFAR
CFAR is proud to deliver our management consulting services to clients, with a commitment to unleashing potential and maximizing impact. We have, for more than three decades, provided guidance and expertise to tackle the thorniest issues—ones often rooted in a misalignment between important organizational goals and individual beliefs about what it will take to achieve them. We come to our work as curious problem-solvers. Our heritage as the Wharton School’s only multi-disciplinary, applied research center lives on in our continued dedication to advising leaders on complex organizational issues where both people and performance matter.
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The need for fact-based reporting of issues important to family offices and successful families and protecting a lifetime of savings has never been greater. Now more than ever, family offices and successful families are under fire. That’s why Policy and Taxation Group is passionately working to increase the awareness of issues important to family offices and successful families, while continuing to strengthen our presence on Capitol Hill.
Policy and Taxation Group is the Voice for Family Offices and Successful Individuals in Washington, DC focused exclusively on the critical tax and economic policies that impact them.
Since 1995, Policy and Taxation Group has been the leading advocacy group working to reduce and eliminate estate tax, gift tax, and generation skipping transfer tax while blocking increased income tax and capital gains taxes, the creation of a wealth tax, and other hostile tax policies that punish hardworking taxpayers and success.
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