Yan’s Note

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Tell Your Own Story

Yan from Owner.One

Banks and financial institutions form perceptions about you based on your profile, which depends on provided information. But, many capital owners overlook this opportunity. Incomplete information can lead to service denial or account freezes. The client profile begins with a Source of Wealth Essay (SoWE), which narrates the story of your income. Yet, a staggering 92% of wealth holders ignore this option. The SoWE outlines the origins and timeline of family wealth, highlighting key milestones in capital accumulation. A well-crafted SoWE minimizes future inquiries. 93.10% of wealth holders believe they have a SoWE fail to realize that the few pages they submit in response to bank requests are not enough and can serve as a red flag for them. The SoWE should be prepared in the language of the countries where family assets are held and share it with successors. While children may not have their own capital history, they can benefit from yours.

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Safe Deposit Boxes: Convenience or Capital Trap?

Yan from Owner.One

Many capital owners keep their money assets that can be easily accessed by their families. One such "convenient" option is bank safe deposit boxes, utilized by up to one-third of surveyed wealth holders. Their accessibility creates the illusion of a quick and simple transfer of assets from the founder to family members. However, only 2.64% of respondents are aware that in several countries, there is a rule: if a safe deposit box is not renewed on time, the bank will open it in the presence of police, and its contents will be placed in a "black bag". Retrieving your money and valuables can only be done in the same manner — under police supervision, which means you will need to explain their origin. A paradox also exists with other popular assets. In an attempt to secure themselves by holding only the most liquid assets, capital owners invest in asset classes that are, in fact, susceptible to capital loss during planned or unplanned transfers to successors.

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Why trusted persons will not replace you?

Yan from Owner.One

Many who begin preparing their wealth for transfer quickly give up, postponing the task once again. Why? Among families with wealth up to $100 million, the penetration of family offices is only 1.46%. These offices manage non-executive administration for no more than 25% of a client’s assets. In the upper-middle-class segment, the penetration rate is even lower, just 0.73%. Capital founders are overly involved in administering 75%-100% of their assets, while family offices handle only the analytical and background work. The founder is the authorized representative in the external world and is often required to personally perform: visiting bank offices, writing emails to brokers, contacting regulators, and executing other verified actions. The founder faces a dilemma: continue managing the assets independently or delegate executive rights. It’s easier to “think about it tomorrow”, especially since managing wealth transfers is not something family offices typically want to handle.

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Psychoanalyst's couch

Yan from Owner.One

Capital founders are confident in their financial decisions. Yet significant losses still occur when transferring wealth to their family. The root cause lies in psychology and a lack of information. Family leaders simply set aside the dividends they receive, focusing on their current business. They delay preparations for transferring wealth and assets to their families. They have minimal knowledge about the process. In this field, there are no rough drafts, and actions must be taken with absolute certainty. The family head needs a counterpart for reflection. The family? Too emotional. Friends or business partners? No one is willing to share examples from their own family and wealth. Consultants? The interaction can be exhausting. Being open about these matters is even more challenging than a session with a psychoanalyst. You are forced to talk not only about personal issues but also financial problems. As a result, capital founders feel alone in their thoughts.

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100 in focus

Yan from Owner.One

Our project focuses 80% on individuals with wealth up to $100 million. Why them specifically? The answer is both deeply philosophical and highly practical. Economists believe that wealth up to $100 million is the most productive. This is the type of capital that is largely tied to creation, growth, and industrial production. Its owners are primarily driven by the desire to do something meaningful. They are not financial rentiers yet, so they actively create added value for any national economy. Any crisis, whether: political, economic, military, or financial, tends to erode this most productive segment of capital first. Crises are factors beyond their control. There is also another side to the problem. People in this category are so absorbed into their current ideas, projects, businesses that no pay attention to preserving their wealth and passing it on within the family. This is an absolutely controllable factor, but they unjustifiably treat it as something beyond their control.

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Revocation of the Presumption of Innocence

Yan from Owner.One

One day, by a unilateral decision of the bank, the client lost access to their capital and assets. Formally, they are still the client’s property, but without the ability to manage them. Presumption of innocence? Forget it — FATF has nullified that. Your capital is not really yours actually. Banks or brokers can impose restrictive measures if they have “reasonable doubts.” Compliance departments don’t answer to bank management but directly to national regulators, and your manager can’t help. The burden of proof isn’t on the bank but on the client, who must prove the legal origin of their assets and maintain ownership continuity. The client will need to gather and submit extensive documentation, yet there’s no guarantee the authorities will be satisfied. And there’s no turning back — you can’t just say, “Give me my money back, I’ll go elsewhere.” Funds could simply be frozen, blocking any transfers, even to your own accounts.

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Accidental Toxicity

Yan from Owner.One

A client can compromise their own bank or brokerage account simply by accepting a payment from a politically exposed person (PEP), a sanctioned individual, or anyone raising concerns related to AML or CFT. Receiving $10k from a "toxic" source could very likely put the entire account at risk, even if it holds $1 million. The payment might not come directly, but from family members or associates of such individuals. The same issue applies in reverse: if a client sends money to someone flagged as high-risk, they could face consequences. According to statistics, only 21.3% of clients are aware of the risks associated with incoming payments. Even fewer — just 9.4% — consider the risks of outgoing transactions. This discrepancy in risk perception is a misconception. For the bank, there's little difference between incoming and outgoing payments, and the incubation period for detecting such transactions can be as long as 1 to 1.5 years.

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Information Asymmetry

Yan from Owner.One

Information asymmetry within wealthy families is a phenomenon that has been known for nearly 100 years. The founder almost never proactively shares or updates family members about assets and capital. But when a negative event occurs, it's often too late. Founders hold an information monopoly, lack reliable channels for passing on this knowledge, and the information itself is not structured for effective transfer. The problem of information asymmetry within families and the associated capital loss has grown exponentially since the 1990s. By 2024, 48.0% of capital owners believed their families would be unable to "take over" the assets due to a lack of complete information. Another 23.7% of owners were even willing to give up as much as 25% of their entire wealth in exchange for a guarantee that the rest would securely pass to their family.

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Traditional Actions

Yan from Owner.One

Typically, a capital founder has considered several options they believe would ensure the transfer of capital to family members in case of unforeseen circumstances. However, their effectiveness as of today is low and continues to decline.
  1. Sharing all information with family members in advance. A critical condition is monthly updates. Neither the founder nor family members are usually willing, able, or equipped to handle this task. The effectiveness of capital transfer is 65.3%.
  2. Involving third parties (lawyers, advisors, trustees). The founder would need to invest significant time in organizing the process. The effectiveness is 68.3% (excluding the risk of abuse).
  3. Drafting a will. The issue is not with the document itself but with the procedure of executing the will and obtaining the rights. A large amount of information about each asset is required, which successors simply don’t have. Modern wills need to be updated quarterly or monthly, which no one does. The effectiveness is 61.2%.

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I'll Think About That Tomorrow

Yan from Owner.One

Founders of capital almost never share information about their wealth and assets with their family in advance. In the total majority of cases, they have no opportunity to do so after something has happened. According to statistics, 89.13% of wealth creators understand everything but do nothing. Why? Most of the responses boil down to the classic "I'll think about it tomorrow" from Scarlett O'Hara in Gone with the Wind. The transfer of capital happens once in a lifetime. Discovering its outcomes, correcting, and restarting it is almost always impossible. In this field, there are no "drafts". Another stimulus for the development of the Scarlett syndrome is the founders' realization that the effectiveness of traditional tools is already below the minimally acceptable threshold of reliability, yet they require disproportionately high efforts and resource expenditures.

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Game over

Yan from Owner.One

What if a wealthy capital owner suddenly becomes incapacitated? In 90% of cases, they haven’t shared any information about their wealth with family. Assets like accounts, safe deposit boxes, brokers, companies, debts, credits, partners, bonds, real estate, stocks, key contacts, proxies, funds, and investments may be lost or become costly to access. Much of the family’s wealth remains unknown. In families worth up to $100 million, 31% to 73% of assets are lost during the transition — a percentage increasing over the past 30 years. Since the 1990s, information has become more valuable than documents, making information asymmetry and capital loss dramatically worse. Without complete information, accessing assets becomes impossible, even if documents can be reconstructed digitally. By 2024, 48% of capital owners believed their families couldn’t access their assets due to lack of information, and 23.7% were willing to forfeit up to 25% of their wealth to ensure the rest reaches their family.

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KYC? Not About Me!

Yan from Owner.One

For various internal reasons, banks may halt a client's transaction or even block an account. This stems from numerous and often opaque KYC (Know Your Client) requirements, as well as its subtypes like KYT (Know Your Transactions), KYB (Know Your Business), and others. The majority of clients (82%) have encountered issues with banking or brokerage transactions to some extent. Yet only 17% of them associated these problems with their own KYC. Of these 17%, only 29% claimed to have a clear understanding of the preventive actions necessary to minimize risks. Merely 4% grasp the depth of issues arising from KYC. At the first signs of trouble, swift action is essential; otherwise, the situation will worsen, and the bank's demands will escalate. Those who proactively attend to their KYCс— keeping maximum documentation readily available, maintaining an up-to-date Source of Wealth Explanation (SoWE), confirming continuous ownership, and adhering to other formal goodwill parameters — are the ones who come out ahead.

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Eliminating Information Asymmetry

Yan from Owner.One

The vast majority (87.10%) of capital owners do not have precise data and detailed attributes of their assets. They also do not have documents for their assets readily available or direct access to them. They cannot independently transfer data to family members and cannot monitor the actions of trusted persons. What is the alternative to traditional mechanisms attempting to ensure the transfer of capital and assets to their family members? It is necessary to achieve confidential information storage, and most importantly — the transfer of information from the founder to family members precisely on time — not earlier or later, but at the exact moment when something happens. Transfer automatically and without the involvement of third parties. Until 2015, such a result was impossible; now, technology can provide this. The development of technologies and market demand have led to the creation of a tool like the Repository of Data on Assets and Capital. The repository's effectiveness is up to 99.94%.

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Vertical and Horizontal Family Capital

Yan from Owner.One

There are many myths and illogical behaviors among wealthy families in our field. Many of these have been analyzed in Penguin Analytics. One prevalent myth is that family money typically transfers vertically (to children). In reality, most transfers are horizontal (to spouses), both planned and unexpected. Analysts (Owner.One, UBS, and local banks) estimate that over the next 10-20 years, $75-95 trillion in capital will be transferred within families. In the next few years alone, $8-10 trillion will be moved horizontally to spouses. This capital will likely stay at the horizontal level for another 10-15 years before moving vertically to children. Key insight: much of the capital loss happens during the transfer itself, not afterward, doubling the actual loss rate. Founders need to pass on not only their wealth but also its detailed and formalized history to meet the increasing KYC (Know Your Customer) demands from financial institutions. Without the founder’s active involvement, it’s almost impossible to reconstruct the capital’s history, leaving family members vulnerable when questions arise about the funds' origins. A surprising 42.86% of capital founders don’t know the details needed for KYC preparation, and an alarming 88.06% of their family members are unaware of these requirements. Only 4.50% of family heads understand that inaction now merely delays the problem, passing it on to their family. Preparing for this is crucial, but that’s a discussion for another time. Recognizing the complexity of capital transfer is the first step.

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Cryptocurrency

Yan from Owner.One

I have nothing against crypto. Quite the opposite. But everything must be done carefully. What’s the main issue with large-scale crypto transactions? In 91% of cases, converting from fiat to crypto and back breaks the chain of ownership, limiting capital mobility. Why? Imagine you have $1M in business dividends. You have all the necessary documentation, making you a respectable capital owner to banks. Now, you decide to purchase cryptocurrency, like Bitcoin or USDT. This is a standalone transaction. Later, when you exchange the crypto back into fiat (whether tomorrow or in a year), that becomes a separate, independent transaction. These two operations are not formally linked. As a result, you’ve traded clean capital for crypto, but when exiting, you no longer have the supporting documentation. The chain of continuous ownership is broken. For small sums, this isn't a big issue, but for large amounts, it becomes a red flag for banks. The receiving bank will demand a clear ownership history, and without it, your funds raise suspicion. Banks today require detailed transparency at every stage of capital accumulation—they want to trace every dollar. When you break the ownership chain with crypto, it becomes difficult, if not impossible, to justify the source of your funds. While this problem can be avoided, statistics show that only 9% of people worry about it in advance.

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SWIFT

Yan from Owner.One

Few people closely track their international payments via SWIFT trackers, though it’s worth doing as it can reveal potential problems. When you send a USD payment, it typically passes through 3-5 banks. If the payment gets delayed, it's likely that one of these banks has compliance or KYC-related questions for the sender. The bank will request the sender’s client profile from the previous bank in the chain. After reviewing the sender’s identity and finances, the bank either processes the payment, returns it, or freezes it. All banks in the chain can be held responsible if a gray-area or illegal payment is flagged, so they carefully check every transaction to avoid liability. If a bank requests more information about a payment, all other banks in the chain will be aware. Your sending bank will likely notice and may monitor your future transactions more closely or review your profile. Tracking payments helps you understand where and why delays occur, even if the payment eventually clears. You can delegate this task to an assistant, as some SWIFT trackers allow tracking by payment number without revealing sensitive details. It’s also essential to maintain a well-prepared client file with your banks—an important topic for another discussion.

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The “Alien - Own” strategy: securing your family’s future

Yan from Owner.One

In today’s world, our lives are diversified not only by types of assets, but also by the jurisdictions where these assets are located. Does ownership of an asset give you your own rights and how can we transfer this capital to heirs without causing them headaches? What rules will govern the inheritance of these assets? The simplest solution might be to draft a will for each individual foreign asset located in its respective country. To create this document, you usually don’t need to travel; in most cases, it can be done at a consulate without the other party’s presence. The key is to plan how to transfer this information to your family in the event of an emergency. Keep in mind that inheritance can be a lengthy and costly process, and until it is finalized, your heirs will have limited access to the assets. This poses a risk of improper management, potentially leading to asset loss. Additionally, inheritance may be subject to high taxes in the relevant country, adding to the financial burden.

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Follow the trail

Yan from Owner.One

You’ve sent a payment to another country, and it’s taking a long time to reach its destination — this is a common scenario. People check the status of the payment with the sending bank, not realizing that there can be at least four intermediaries involved in the payment chain. If any bank in this chain holds the payment longer than usual, it’s highly likely that you’ll be required to provide more detailed KYC (Know Your Customer) data next time, even if the payment goes through this time. To be prepared and to track your transactions, you can use services to monitor SWIFT payments. These services track the status of your cross-border transactions in real time and notify you of any delays. You can subscribe to paid versions or use free alternatives available online or through Telegram bots. If you don’t want to spend time on this, you can delegate the task to assistant, who can also monitor the transactions. However, keep in mind the risk of disclosing confidential information, as the data will show either the amount or the purpose of the transaction. Additionally, a major drawback of these services is that they provide data only in real time and do not maintain statistics for individuals.

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Ski slopes

Yan from Owner.One

A black slope can be easier with good snow than a blue slope with bad snow. Often, the reasons behind account freezes or bank-canceled transactions are not immediately clear. Regulatory criteria for deeming client transactions suspicious are vague. Sometimes, this judgment is made because a client has a large number of diverse transactions. This can lead to a transaction freeze and a request for additional documentation. To avoid this, separate your bank accounts by transaction types, and ideally, conduct different types of transactions through different banks. This reduces the frequency of regular and unexpected requests and helps you manage and respond to bank inquiries. For example, use separate accounts for dividends, current expenses, bonuses, and investment income. This approach saves time, is convenient, and reduces compliance risks. Of course, dividing assets among multiple accounts and banks may increase the complexity of financial planning. Additionally, if you mistakenly mix up the accounts and conduct an atypical transaction, the regulator will likely send you a request.

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Red button

Yan from Owner.One

In the subway, on trains, and at workplaces, there is always a red button for emergencies. In human life, the variations of unexpected events are much greater. Nevertheless, statistics show that 99.2% of wealthy families do not have a precise action plan for emergencies. Have you thought about what you will do and what plan your family will follow if such an event occurs? To avoid being part of this majority statistic, prepare in advance by developing several future scenarios. Even a simple list of basic actions and assets will prepare you and your family for the most unexpected events. Remember to update the plan every six months. In the event of your sudden absence, the survival of your entire family and the preservation of assets will entirely depend on having clearly formulated and planned actions.

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The rearview mirror or the history of your money

Yan from Owner.One

Recently, banking compliance procedures have become increasingly stringent, and it is likely that they will only get worse in the future. Primarily, they request documents proving the continuity of ownership. (Continuity of ownership refers to the history of the origin of your wealth). The timeframe for these requests has also changed: initially, regulators were interested in information from the past 6 months, then from the past year, and then from the past 3 years. These days, you may be required to provide data from the past 10 years. If you have not yet recovered your data, each day you wait only worsens your situation, as your data becomes outdated while the depth of bank inquiries increases. If you do not start addressing this now, eventually these two trends will intersect, and you will find yourself in an untenable situation. Start by recovering copies of documents from the past three years and then delve deeper. Recovering some documents may be difficult or impossible, but by starting this process now, you will already be ahead of many. *Continuity of ownership - the history of all your assets

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Rhino running

Yan from Owner.One

A rhinoceros runs fast and sees poorly, but its weight makes it a problem for anything in its path. Banks and partners don’t listen to you; they evaluate a person based on their digital profile. Services such as World-Check or Lexis Nexis are the sources of this data. These platforms were created to check counterparties for involvement in illegal financial activities. However, in reality, they contain information on millions of people. These services are often associated with scandals and data leaks, unjust categorization of individuals as suspicious, and the inclusion of data from irrelevant sources, yet they continue to be widely used. Do not leave this issue unattended. Request information about yourself regularly, at least every six months. You don't need to have done something wrong; it's enough for the World-Check algorithm to flag you as suspicious, or for someone in your contacts to be linked to questionable transactions. There's also the risk of database errors or incorrect interpretations. World-Check is a black box that significantly impacts your capital and assets, potentially leading to loan refusals, blocked transactions, denied bank accounts, and even revocation of residence permits or citizenship. Bank compliance departments work solely with documents and digital traces, so if you face unexplained refusals or biased treatment, World-Check could be the reason.

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Playing by one side’s rules

Yan from Owner.One

Don’t get complacent, if you pass bank compliance when opening an account. Banks regularly conduct reviews of their clients and send requests for additional documentation. They may ask for statements or recommendation letters. Get ready for it in advance; otherwise, you may not have sufficient time to gather the necessary documents, leading to the refusal of transactions. To stay ahead, request recommendation letters, annual, and semi-annual statements from all banks where you hold accounts every six months. Typically, bank inquiries cover the current and previous year, and recommendation letters are valid for six to twelve months. To save time, create a template that can be sent to all relevant banks. Most banks accept free-form requests, but some may require you to use their specific templates. In such cases, you’ll need to send separate requests.

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Your Proxy’s Personal Life – Your Risk

Yan from Owner.One

Once upon a time, you entrusted part of your wealth to a relative, former classmate, or just a trusted person, making them the formal owner to conceal your involvement. Both of you were relatively young, but as the years went by, your wealth grew, along with social obligations. Now, both of you have families, children, perhaps remarriages, and different life changes, like acquiring new citizenship. The asset you entrusted them with is no longer entirely yours. If something happens to them, their family may take priority over you, and you could end up with just half, or even one-eighth, of your factory, which they officially own. And if they’ve acquired problematic citizenship, such as U.S. citizenship, returning the asset to you could trigger significant taxes. Does your proxy have a prenuptial agreement? If it’s in your favor, it might not help much in practice, but if it favors their family, it becomes your problem. Do they have large loans with personal guarantees or risks of subsidiary liability? The list of potential complications goes on. In many cases, such arrangements are perfectly legal. However, legality doesn’t eliminate the issues described above. Talk to your proxy, assess their situation across all risk zones, model potential consequences, and prepare the necessary documents to protect your interests. This note doesn’t cover official managers with formal management agreements. That’s a topic for another note.

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A timeless classic in a new way

Yan from Owner.One

In the event of an emergency, conveying all necessary details to family members can be challenging or impossible. Many believe that existing methods are either unreliable or cumbersome. However, the solution can be simple: grab a sheet of paper and a black marker. Write down a list of your assets, capital, and their locations. Make several copies of this document. Use a black marker to obscure different parts of the information on each copy (this can also be done digitally in MS Word). To ensure the information cannot be read through the redactions, photocopy these documents again. Distribute the lists to different family members. Now, your family has crucial information that they can use in a critical moment, but they will need to come together to combine the pieces of the puzzle. Risks: this method is not perfect, but is certainly better than having no plan at all. It works best if the family members are in reasonably good relationships with each other.

Expand

Tell Your Own Story

Yan from Owner.One

Banks and financial institutions form perceptions about you based on your profile, which depends on provided information. But, many capital owners overlook this opportunity. Incomplete information can lead to service denial or account freezes. The client profile begins with a Source of Wealth Essay (SoWE), which narrates the story of your income. Yet, a staggering 92% of wealth holders ignore this option. The SoWE outlines the origins and timeline of family wealth, highlighting key milestones in capital accumulation. A well-crafted SoWE minimizes future inquiries. 93.10% of wealth holders believe they have a SoWE fail to realize that the few pages they submit in response to bank requests are not enough and can serve as a red flag for them. The SoWE should be prepared in the language of the countries where family assets are held and share it with successors. While children may not have their own capital history, they can benefit from yours.

Expand

Safe Deposit Boxes: Convenience or Capital Trap?

Yan from Owner.One

Many capital owners keep their money assets that can be easily accessed by their families. One such "convenient" option is bank safe deposit boxes, utilized by up to one-third of surveyed wealth holders. Their accessibility creates the illusion of a quick and simple transfer of assets from the founder to family members. However, only 2.64% of respondents are aware that in several countries, there is a rule: if a safe deposit box is not renewed on time, the bank will open it in the presence of police, and its contents will be placed in a "black bag". Retrieving your money and valuables can only be done in the same manner — under police supervision, which means you will need to explain their origin. A paradox also exists with other popular assets. In an attempt to secure themselves by holding only the most liquid assets, capital owners invest in asset classes that are, in fact, susceptible to capital loss during planned or unplanned transfers to successors.

Expand

Why trusted persons will not replace you?

Yan from Owner.One

Many who begin preparing their wealth for transfer quickly give up, postponing the task once again. Why? Among families with wealth up to $100 million, the penetration of family offices is only 1.46%. These offices manage non-executive administration for no more than 25% of a client’s assets. In the upper-middle-class segment, the penetration rate is even lower, just 0.73%. Capital founders are overly involved in administering 75%-100% of their assets, while family offices handle only the analytical and background work. The founder is the authorized representative in the external world and is often required to personally perform: visiting bank offices, writing emails to brokers, contacting regulators, and executing other verified actions. The founder faces a dilemma: continue managing the assets independently or delegate executive rights. It’s easier to “think about it tomorrow”, especially since managing wealth transfers is not something family offices typically want to handle.

Expand

Psychoanalyst's couch

Yan from Owner.One

Capital founders are confident in their financial decisions. Yet significant losses still occur when transferring wealth to their family. The root cause lies in psychology and a lack of information. Family leaders simply set aside the dividends they receive, focusing on their current business. They delay preparations for transferring wealth and assets to their families. They have minimal knowledge about the process. In this field, there are no rough drafts, and actions must be taken with absolute certainty. The family head needs a counterpart for reflection. The family? Too emotional. Friends or business partners? No one is willing to share examples from their own family and wealth. Consultants? The interaction can be exhausting. Being open about these matters is even more challenging than a session with a psychoanalyst. You are forced to talk not only about personal issues but also financial problems. As a result, capital founders feel alone in their thoughts.

Expand

100 in focus

Yan from Owner.One

Our project focuses 80% on individuals with wealth up to $100 million. Why them specifically? The answer is both deeply philosophical and highly practical. Economists believe that wealth up to $100 million is the most productive. This is the type of capital that is largely tied to creation, growth, and industrial production. Its owners are primarily driven by the desire to do something meaningful. They are not financial rentiers yet, so they actively create added value for any national economy. Any crisis, whether: political, economic, military, or financial, tends to erode this most productive segment of capital first. Crises are factors beyond their control. There is also another side to the problem. People in this category are so absorbed into their current ideas, projects, businesses that no pay attention to preserving their wealth and passing it on within the family. This is an absolutely controllable factor, but they unjustifiably treat it as something beyond their control.

Expand

Revocation of the Presumption of Innocence

Yan from Owner.One

One day, by a unilateral decision of the bank, the client lost access to their capital and assets. Formally, they are still the client’s property, but without the ability to manage them. Presumption of innocence? Forget it — FATF has nullified that. Your capital is not really yours actually. Banks or brokers can impose restrictive measures if they have “reasonable doubts.” Compliance departments don’t answer to bank management but directly to national regulators, and your manager can’t help. The burden of proof isn’t on the bank but on the client, who must prove the legal origin of their assets and maintain ownership continuity. The client will need to gather and submit extensive documentation, yet there’s no guarantee the authorities will be satisfied. And there’s no turning back — you can’t just say, “Give me my money back, I’ll go elsewhere.” Funds could simply be frozen, blocking any transfers, even to your own accounts.

Expand

Accidental Toxicity

Yan from Owner.One

A client can compromise their own bank or brokerage account simply by accepting a payment from a politically exposed person (PEP), a sanctioned individual, or anyone raising concerns related to AML or CFT. Receiving $10k from a "toxic" source could very likely put the entire account at risk, even if it holds $1 million. The payment might not come directly, but from family members or associates of such individuals. The same issue applies in reverse: if a client sends money to someone flagged as high-risk, they could face consequences. According to statistics, only 21.3% of clients are aware of the risks associated with incoming payments. Even fewer — just 9.4% — consider the risks of outgoing transactions. This discrepancy in risk perception is a misconception. For the bank, there's little difference between incoming and outgoing payments, and the incubation period for detecting such transactions can be as long as 1 to 1.5 years.

Expand

Information Asymmetry

Yan from Owner.One

Information asymmetry within wealthy families is a phenomenon that has been known for nearly 100 years. The founder almost never proactively shares or updates family members about assets and capital. But when a negative event occurs, it's often too late. Founders hold an information monopoly, lack reliable channels for passing on this knowledge, and the information itself is not structured for effective transfer. The problem of information asymmetry within families and the associated capital loss has grown exponentially since the 1990s. By 2024, 48.0% of capital owners believed their families would be unable to "take over" the assets due to a lack of complete information. Another 23.7% of owners were even willing to give up as much as 25% of their entire wealth in exchange for a guarantee that the rest would securely pass to their family.

Expand

Traditional Actions

Yan from Owner.One

Typically, a capital founder has considered several options they believe would ensure the transfer of capital to family members in case of unforeseen circumstances. However, their effectiveness as of today is low and continues to decline.
  1. Sharing all information with family members in advance. A critical condition is monthly updates. Neither the founder nor family members are usually willing, able, or equipped to handle this task. The effectiveness of capital transfer is 65.3%.
  2. Involving third parties (lawyers, advisors, trustees). The founder would need to invest significant time in organizing the process. The effectiveness is 68.3% (excluding the risk of abuse).
  3. Drafting a will. The issue is not with the document itself but with the procedure of executing the will and obtaining the rights. A large amount of information about each asset is required, which successors simply don’t have. Modern wills need to be updated quarterly or monthly, which no one does. The effectiveness is 61.2%.

Expand

I'll Think About That Tomorrow

Yan from Owner.One

Founders of capital almost never share information about their wealth and assets with their family in advance. In the total majority of cases, they have no opportunity to do so after something has happened. According to statistics, 89.13% of wealth creators understand everything but do nothing. Why? Most of the responses boil down to the classic "I'll think about it tomorrow" from Scarlett O'Hara in Gone with the Wind. The transfer of capital happens once in a lifetime. Discovering its outcomes, correcting, and restarting it is almost always impossible. In this field, there are no "drafts". Another stimulus for the development of the Scarlett syndrome is the founders' realization that the effectiveness of traditional tools is already below the minimally acceptable threshold of reliability, yet they require disproportionately high efforts and resource expenditures.

Expand

Game over

Yan from Owner.One

What if a wealthy capital owner suddenly becomes incapacitated? In 90% of cases, they haven’t shared any information about their wealth with family. Assets like accounts, safe deposit boxes, brokers, companies, debts, credits, partners, bonds, real estate, stocks, key contacts, proxies, funds, and investments may be lost or become costly to access. Much of the family’s wealth remains unknown. In families worth up to $100 million, 31% to 73% of assets are lost during the transition — a percentage increasing over the past 30 years. Since the 1990s, information has become more valuable than documents, making information asymmetry and capital loss dramatically worse. Without complete information, accessing assets becomes impossible, even if documents can be reconstructed digitally. By 2024, 48% of capital owners believed their families couldn’t access their assets due to lack of information, and 23.7% were willing to forfeit up to 25% of their wealth to ensure the rest reaches their family.

Expand

KYC? Not About Me!

Yan from Owner.One

For various internal reasons, banks may halt a client's transaction or even block an account. This stems from numerous and often opaque KYC (Know Your Client) requirements, as well as its subtypes like KYT (Know Your Transactions), KYB (Know Your Business), and others. The majority of clients (82%) have encountered issues with banking or brokerage transactions to some extent. Yet only 17% of them associated these problems with their own KYC. Of these 17%, only 29% claimed to have a clear understanding of the preventive actions necessary to minimize risks. Merely 4% grasp the depth of issues arising from KYC. At the first signs of trouble, swift action is essential; otherwise, the situation will worsen, and the bank's demands will escalate. Those who proactively attend to their KYCс— keeping maximum documentation readily available, maintaining an up-to-date Source of Wealth Explanation (SoWE), confirming continuous ownership, and adhering to other formal goodwill parameters — are the ones who come out ahead.

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Eliminating Information Asymmetry

Yan from Owner.One

The vast majority (87.10%) of capital owners do not have precise data and detailed attributes of their assets. They also do not have documents for their assets readily available or direct access to them. They cannot independently transfer data to family members and cannot monitor the actions of trusted persons. What is the alternative to traditional mechanisms attempting to ensure the transfer of capital and assets to their family members? It is necessary to achieve confidential information storage, and most importantly — the transfer of information from the founder to family members precisely on time — not earlier or later, but at the exact moment when something happens. Transfer automatically and without the involvement of third parties. Until 2015, such a result was impossible; now, technology can provide this. The development of technologies and market demand have led to the creation of a tool like the Repository of Data on Assets and Capital. The repository's effectiveness is up to 99.94%.

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Vertical and Horizontal Family Capital

Yan from Owner.One

There are many myths and illogical behaviors among wealthy families in our field. Many of these have been analyzed in Penguin Analytics. One prevalent myth is that family money typically transfers vertically (to children). In reality, most transfers are horizontal (to spouses), both planned and unexpected. Analysts (Owner.One, UBS, and local banks) estimate that over the next 10-20 years, $75-95 trillion in capital will be transferred within families. In the next few years alone, $8-10 trillion will be moved horizontally to spouses. This capital will likely stay at the horizontal level for another 10-15 years before moving vertically to children. Key insight: much of the capital loss happens during the transfer itself, not afterward, doubling the actual loss rate. Founders need to pass on not only their wealth but also its detailed and formalized history to meet the increasing KYC (Know Your Customer) demands from financial institutions. Without the founder’s active involvement, it’s almost impossible to reconstruct the capital’s history, leaving family members vulnerable when questions arise about the funds' origins. A surprising 42.86% of capital founders don’t know the details needed for KYC preparation, and an alarming 88.06% of their family members are unaware of these requirements. Only 4.50% of family heads understand that inaction now merely delays the problem, passing it on to their family. Preparing for this is crucial, but that’s a discussion for another time. Recognizing the complexity of capital transfer is the first step.

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Cryptocurrency

Yan from Owner.One

I have nothing against crypto. Quite the opposite. But everything must be done carefully. What’s the main issue with large-scale crypto transactions? In 91% of cases, converting from fiat to crypto and back breaks the chain of ownership, limiting capital mobility. Why? Imagine you have $1M in business dividends. You have all the necessary documentation, making you a respectable capital owner to banks. Now, you decide to purchase cryptocurrency, like Bitcoin or USDT. This is a standalone transaction. Later, when you exchange the crypto back into fiat (whether tomorrow or in a year), that becomes a separate, independent transaction. These two operations are not formally linked. As a result, you’ve traded clean capital for crypto, but when exiting, you no longer have the supporting documentation. The chain of continuous ownership is broken. For small sums, this isn't a big issue, but for large amounts, it becomes a red flag for banks. The receiving bank will demand a clear ownership history, and without it, your funds raise suspicion. Banks today require detailed transparency at every stage of capital accumulation—they want to trace every dollar. When you break the ownership chain with crypto, it becomes difficult, if not impossible, to justify the source of your funds. While this problem can be avoided, statistics show that only 9% of people worry about it in advance.

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SWIFT

Yan from Owner.One

Few people closely track their international payments via SWIFT trackers, though it’s worth doing as it can reveal potential problems. When you send a USD payment, it typically passes through 3-5 banks. If the payment gets delayed, it's likely that one of these banks has compliance or KYC-related questions for the sender. The bank will request the sender’s client profile from the previous bank in the chain. After reviewing the sender’s identity and finances, the bank either processes the payment, returns it, or freezes it. All banks in the chain can be held responsible if a gray-area or illegal payment is flagged, so they carefully check every transaction to avoid liability. If a bank requests more information about a payment, all other banks in the chain will be aware. Your sending bank will likely notice and may monitor your future transactions more closely or review your profile. Tracking payments helps you understand where and why delays occur, even if the payment eventually clears. You can delegate this task to an assistant, as some SWIFT trackers allow tracking by payment number without revealing sensitive details. It’s also essential to maintain a well-prepared client file with your banks—an important topic for another discussion.

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The “Alien - Own” strategy: securing your family’s future

Yan from Owner.One

In today’s world, our lives are diversified not only by types of assets, but also by the jurisdictions where these assets are located. Does ownership of an asset give you your own rights and how can we transfer this capital to heirs without causing them headaches? What rules will govern the inheritance of these assets? The simplest solution might be to draft a will for each individual foreign asset located in its respective country. To create this document, you usually don’t need to travel; in most cases, it can be done at a consulate without the other party’s presence. The key is to plan how to transfer this information to your family in the event of an emergency. Keep in mind that inheritance can be a lengthy and costly process, and until it is finalized, your heirs will have limited access to the assets. This poses a risk of improper management, potentially leading to asset loss. Additionally, inheritance may be subject to high taxes in the relevant country, adding to the financial burden.

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Follow the trail

Yan from Owner.One

You’ve sent a payment to another country, and it’s taking a long time to reach its destination — this is a common scenario. People check the status of the payment with the sending bank, not realizing that there can be at least four intermediaries involved in the payment chain. If any bank in this chain holds the payment longer than usual, it’s highly likely that you’ll be required to provide more detailed KYC (Know Your Customer) data next time, even if the payment goes through this time. To be prepared and to track your transactions, you can use services to monitor SWIFT payments. These services track the status of your cross-border transactions in real time and notify you of any delays. You can subscribe to paid versions or use free alternatives available online or through Telegram bots. If you don’t want to spend time on this, you can delegate the task to assistant, who can also monitor the transactions. However, keep in mind the risk of disclosing confidential information, as the data will show either the amount or the purpose of the transaction. Additionally, a major drawback of these services is that they provide data only in real time and do not maintain statistics for individuals.

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Ski slopes

Yan from Owner.One

A black slope can be easier with good snow than a blue slope with bad snow. Often, the reasons behind account freezes or bank-canceled transactions are not immediately clear. Regulatory criteria for deeming client transactions suspicious are vague. Sometimes, this judgment is made because a client has a large number of diverse transactions. This can lead to a transaction freeze and a request for additional documentation. To avoid this, separate your bank accounts by transaction types, and ideally, conduct different types of transactions through different banks. This reduces the frequency of regular and unexpected requests and helps you manage and respond to bank inquiries. For example, use separate accounts for dividends, current expenses, bonuses, and investment income. This approach saves time, is convenient, and reduces compliance risks. Of course, dividing assets among multiple accounts and banks may increase the complexity of financial planning. Additionally, if you mistakenly mix up the accounts and conduct an atypical transaction, the regulator will likely send you a request.

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Red button

Yan from Owner.One

In the subway, on trains, and at workplaces, there is always a red button for emergencies. In human life, the variations of unexpected events are much greater. Nevertheless, statistics show that 99.2% of wealthy families do not have a precise action plan for emergencies. Have you thought about what you will do and what plan your family will follow if such an event occurs? To avoid being part of this majority statistic, prepare in advance by developing several future scenarios. Even a simple list of basic actions and assets will prepare you and your family for the most unexpected events. Remember to update the plan every six months. In the event of your sudden absence, the survival of your entire family and the preservation of assets will entirely depend on having clearly formulated and planned actions.

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The rearview mirror or the history of your money

Yan from Owner.One

Recently, banking compliance procedures have become increasingly stringent, and it is likely that they will only get worse in the future. Primarily, they request documents proving the continuity of ownership. (Continuity of ownership refers to the history of the origin of your wealth). The timeframe for these requests has also changed: initially, regulators were interested in information from the past 6 months, then from the past year, and then from the past 3 years. These days, you may be required to provide data from the past 10 years. If you have not yet recovered your data, each day you wait only worsens your situation, as your data becomes outdated while the depth of bank inquiries increases. If you do not start addressing this now, eventually these two trends will intersect, and you will find yourself in an untenable situation. Start by recovering copies of documents from the past three years and then delve deeper. Recovering some documents may be difficult or impossible, but by starting this process now, you will already be ahead of many. *Continuity of ownership - the history of all your assets

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Rhino running

Yan from Owner.One

A rhinoceros runs fast and sees poorly, but its weight makes it a problem for anything in its path. Banks and partners don’t listen to you; they evaluate a person based on their digital profile. Services such as World-Check or Lexis Nexis are the sources of this data. These platforms were created to check counterparties for involvement in illegal financial activities. However, in reality, they contain information on millions of people. These services are often associated with scandals and data leaks, unjust categorization of individuals as suspicious, and the inclusion of data from irrelevant sources, yet they continue to be widely used. Do not leave this issue unattended. Request information about yourself regularly, at least every six months. You don't need to have done something wrong; it's enough for the World-Check algorithm to flag you as suspicious, or for someone in your contacts to be linked to questionable transactions. There's also the risk of database errors or incorrect interpretations. World-Check is a black box that significantly impacts your capital and assets, potentially leading to loan refusals, blocked transactions, denied bank accounts, and even revocation of residence permits or citizenship. Bank compliance departments work solely with documents and digital traces, so if you face unexplained refusals or biased treatment, World-Check could be the reason.

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Playing by one side’s rules

Yan from Owner.One

Don’t get complacent, if you pass bank compliance when opening an account. Banks regularly conduct reviews of their clients and send requests for additional documentation. They may ask for statements or recommendation letters. Get ready for it in advance; otherwise, you may not have sufficient time to gather the necessary documents, leading to the refusal of transactions. To stay ahead, request recommendation letters, annual, and semi-annual statements from all banks where you hold accounts every six months. Typically, bank inquiries cover the current and previous year, and recommendation letters are valid for six to twelve months. To save time, create a template that can be sent to all relevant banks. Most banks accept free-form requests, but some may require you to use their specific templates. In such cases, you’ll need to send separate requests.

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Your Proxy’s Personal Life – Your Risk

Yan from Owner.One

Once upon a time, you entrusted part of your wealth to a relative, former classmate, or just a trusted person, making them the formal owner to conceal your involvement. Both of you were relatively young, but as the years went by, your wealth grew, along with social obligations. Now, both of you have families, children, perhaps remarriages, and different life changes, like acquiring new citizenship. The asset you entrusted them with is no longer entirely yours. If something happens to them, their family may take priority over you, and you could end up with just half, or even one-eighth, of your factory, which they officially own. And if they’ve acquired problematic citizenship, such as U.S. citizenship, returning the asset to you could trigger significant taxes. Does your proxy have a prenuptial agreement? If it’s in your favor, it might not help much in practice, but if it favors their family, it becomes your problem. Do they have large loans with personal guarantees or risks of subsidiary liability? The list of potential complications goes on. In many cases, such arrangements are perfectly legal. However, legality doesn’t eliminate the issues described above. Talk to your proxy, assess their situation across all risk zones, model potential consequences, and prepare the necessary documents to protect your interests. This note doesn’t cover official managers with formal management agreements. That’s a topic for another note.

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A timeless classic in a new way

Yan from Owner.One

In the event of an emergency, conveying all necessary details to family members can be challenging or impossible. Many believe that existing methods are either unreliable or cumbersome. However, the solution can be simple: grab a sheet of paper and a black marker. Write down a list of your assets, capital, and their locations. Make several copies of this document. Use a black marker to obscure different parts of the information on each copy (this can also be done digitally in MS Word). To ensure the information cannot be read through the redactions, photocopy these documents again. Distribute the lists to different family members. Now, your family has crucial information that they can use in a critical moment, but they will need to come together to combine the pieces of the puzzle. Risks: this method is not perfect, but is certainly better than having no plan at all. It works best if the family members are in reasonably good relationships with each other.

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Yan’s Note

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Key Takeaways

  1. Wills are no shortcuts to success in family wealth transfers. In most cases, they are outdated, contested, and insufficient.
  2. Avoidance and sidelining are driving failures in equipping family members to act in the event of force majeure. 
  3. Prioritize wealth information over static documents. The latter can be restored. Without elaborate information on assets, nothing can be done. 

The Danger Ahead

All families lose money in wealth transfers from one generation to the next. However, wealth owners, and their families, with assets ranging from $3 million to $100 million, face the highest failure rate. They account for 75% of total losses in both emergency and planned intergenerational transfers.

What are the underlying reasons for this? Owner.One, a service for families who are worth $3M-$100M in assets, conducted the research to find evidence-based answers.

In total, we surveyed 13,500 capital founders across 18 countries. According to the study, the average loss rate is 34%. It is estimated that this incurs losses ranging from $1.2 million to $34 million for these families.

Fact: Research conclusions are supported by data on assets with unidentified owners. For bank deposit boxes, the rate is 21%. For luxury homes, it is 16%, and for digital assets, it is 23%.

 

Acquiring, Preserving, and Transferring Wealth

It takes business acumen and entrepreneurial skills to build a fortune worth up to $100 million. As first-generation wealth creators, our respondents demonstrated outstanding abilities in both domains.

However, their approach to managing family wealth lacks a comparable level of efficiency. Only 14% of them share pertinent information with their families. This is vital to facilitate the transfer. Conversely, 68% do not disclose any data at all. Moreover, in 98% of cases, wealth-related documents or wills are outdated or non-existent.

If wealth owners applied similar principles to manage their business activities, they would probably run out of business quite quickly. Acquiring, preserving, and transferring wealth demands a different skill set.

At this point, ultra and high-net-worth individuals (U/HNWI) stand on the opposite side of the fence, compared to ultra-rich families with a net worth starting from $100 million. The latter have already established family offices, trusts, or other legal structures to manage their assets.

Our survey revealed that just 0.45% of U/HNWI families have trusts or family offices. In cases where they exist, these structures tend to manage only a portion of the wealth. On average, only 30% of their assets are managed by family offices, trusts, or funds.

As a result, wealth owners with $3 million to $100 million and their families are chronically unprepared for the great wealth transfer. What are other factors contributing to this?

 

Insecure Data Storage

Study findings suggest that, on average, up to 31% of family wealth is lost during transfer, due to a lack of comprehensive data on assets. What are the origins of these gaps?

Fully 81% of capital founders prefer to maintain and manage records and store information, regarding family wealth, themselves. Unfortunately, in 97% of cases, they opt for unreliable methods to complete these tasks.

It is indicative that most wealth owners utilize conservative, yet insecure methods. Almost half of this number (49%) simply put documents in a box, and use hand-written notes or spreadsheets.

These practices result in approximately one-sixth of vital information being irretrievably lost annually. Without it, passing Know Your Customer (KYC) procedures or claiming assets becomes a near-impossible task for families.

 

Information Monopoly and Asymmetry

In most cases, capital founders gravitate towards becoming the sole owners of family fortune-related information. They monopolize knowledge on asset classes, legal structures, sources of origin, relevant business contacts, instructions and limitations of power of attorney, etc. 

This also creates an information vacuum. Wealth founders are reluctant to share their knowledge in advance for two reasons. First, they fear that premature disclosure could trigger intra-family conflicts. Second, younger generations could lose their motivation for education and long-term career planning.

At its core, wealth transfer touches on the most sensitive topics for every individual. Family relations and personal finances are not common topics for conversation, even with close friends or trusted professionals.

For these reasons, family wealth transfer often becomes an elephant in the room. Understandably, 85% of wealth owners prefer not to disclose any information. Even when they do, the shared data often has no practical value in connection with the family wealth transfer. This could be because of a possible lack of completeness or currency.

 

The Burden of Avoidance

The common misconception is that transferring assets from one generation to the next will be straightforward. The process is perceived as obvious, with no conscious thought given to forward planning. 

According to the study, only 6% of wealth owners have drafted or are in the process of drafting a wealth transfer plan. In contrast, the next owner must know up to 20 details, and sometimes even more, about a single asset to be able to claim ownership. 

The evolving KYC requirements further complicate the matter. Regulations on capital origins and proofs of ownership continuity tighten when assets and capital are transferred from a wealth owner to successors.

Unfortunately, only 4.5% of all respondents realize the consequences of their inaction. Avoidance of planning ahead shifts the burden onto family members and children. This significantly reduces their chances to successfully gain ownership.

Eight out of ten capital founders do not take any action to resolve the information monopoly problem. This attitude largely contributes to the high family wealth transfer failure rate.

As a result, 93% of respondents openly admitted that they had no understanding of how their family will act in the event of force majeure.  Can this be remedied?

 

Wealth Transfer Check-Up

Let us look at a step-by-step guide on how to avoid losing millions in the wealth transfer process.

Step 1: Set a Framework for the Wealth Transfer

Who are the next owners? This is square one. Undoubtedly, family matters can be intricate. Before delving into a full-fledged wealth transfer strategy, take a step back and consider who are all the players in the process. Evaluate the eligibility of both immediate and extended family members. Then, assess how each stakeholder’s needs may influence decisions.

 

Which long-term obligations do you want to fulfill? Some may require stable financial support for special care. For the younger generation, you may want to establish education opportunities. Life scenarios vary, but dedicate time to outline your vision and how you can support them or prevent actions you consider unacceptable.

What is your desirable endgame for the transfer? Define the recipients, the assets, and the timing. Consider whether to transfer a particular asset entirely or to distribute it in shares among the next owners.

How do you address the information monopoly and asymmetry? The best metaphor for family wealth is an iceberg. The largest part of it is always beneath the surface. Examine which vital information, about assets, is unknown to the next owners. How can you help them overcome this information black hole?

What are your legacy and philanthropy goals? If you want your wealth to have a lasting impact or address significant issues, incorporate this into your planning. Consider the role the next owner may play in this.

Who are the relevant business contacts? In case of an emergency, identify the people who can support the transfer process. What are their directions, powers, and instructions?

 

Step 2: Review Your Assets and Liabilities

What do you own? To increase the likelihood of a successful transfer, compile comprehensive records of all assets and capital you own during the forward planning phase. Ensure you categorize all asset classes, including bank accou nts, brokerage accounts, deposit boxes, real estate, jewelry, digital assets, stocks, bonds, public funds, gemstones, legal entities, and others.

What are the ownership structures? This is crucial, especially in cases of indirect ownership structures. Consider what legal frameworks protect your family’s ownership rights in case of unforeseen events.

What are your liabilities? Apply the same detailed approach to debts and obligations. These may include mortgages, secured or unsecured debts, or shared or guaranteed obligations like student loans or mortgages for children.

 

Step 3: First focus on the information, then on the documents

Why is information more important than documents? Our research team interviewed over 30 trusted professionals from 7 countries on family wealth transfers. The majority (90%) concluded that for successors, claiming assets is no longer a major issue if comprehensive data is at hand. Success is a matter of following well-established routines and legal procedures.

The heart of the problem is getting the right information at the right time about which assets to claim, their location, structure, legal status, and other specific details. While one can restore documents, nothing can be done without information about which assets the documents are missing.

What is the Source of a Wealth Essay (SoWE)? In some cases, this document is known as the Source of Funds Memorandum. It is a unique document where capital founders chronicle the creation of their fortunes. The SoWE provides an opportunity to write the history of your family wealth, in your terms and words. All other documents originate from external sources, such as contracts, letters of recommendation, statements, etc. 

It is recommended to prepare the SoWE in the language of the countries where your family members hold passports and residence permits. If your asset is located in a country with a different language, consider adding a certified translation of the SoWE in that language as well.

 

Step 4: Set the Right Timing

 

What to do once information on assets has been prepared? Review the comprehensiveness of documents and their copies for each asset. Financial institutions often require account histories, letters of recommendation, copies of money transfers, proof of ownership continuity, or other data arrays. 

You can only do that efficiently on one precondition. That is, if you store all documents, even if they seem unimportant at that moment in time. These could be demanded by financial institutions at short notice. For example, the typical timeline for a bank inquiry is a few days.

When to disclose information to family? Timing is the key factor in the outcome of family wealth transfer. Information must be delivered precisely at the right moment to avoid two major risks. 

The first is early disclosure. A family member might be tempted by the prospect of wealth before they are ready to handle the responsibility that comes with it. 

The second is the risk of losing assets. Typically, family members have a narrow window, from 3 to 6 months, to claim ownership of assets. Once this period elapses, assets are lost. The rule of thumb should be “Not sooner or later, but just-in-time”. The disclosure process must connect the next owners, assets, and trusted professionals. All parties involved should be equipped with sufficient data and instructions at the appropriate time.

Four Additional Questions for Family Wealth Self-Review

 

Which wealth information should be at hand? 

Check if you have the following documents:

  • Letters of recommendation from banks, brokers, or other financial institutions. These letters should be no older than six months.
  • 1, 3, and 10-year cash flow statements for all your accounts, including lists of accounts with their exact opening dates.
  • Rationales for all large account receipts and expenditures.
  • Details on the companies that paid your dividends.
  • Similar data for other large earnings, such as investments and bonds.
  • A regularly updated Source of Wealth Essay.

Is there a way to evaluate if my document filing is adequate?

We surveyed both wealth owners and bank compliance officers to clarify their definitions of “good filing”.

The question was straightforward: What is the volume of documents one must possess to confidently interact with financial institutions?

The unit of measurement scale was calculated as the number of pages of text.

Consult the table below to evaluate if your document filing is adequate.

 

Why is SoWE of primary importance?

At the time of the research, less than 1% of U/HNWIs had elaborate Source of Wealth Essays. 

This 1% has documentary support that is detailed enough to substantiate a trustworthy history of the origins of the family’s fortunes.

The importance of a well-crafted SoWE will only increase due to ever-evolving KYC regulations. In the first 5 to 10 years, the next owners will still rely on the predecessor’s SoWE to interact with financial institutions, proving the origins and ownership of the assets.

To make a bold statement, how wealth owners prepare their SoWE today is how the next owners will pass KYC requirements tomorrow.

Are wills of no use in family wealth transfers?

In 84% of cases, our respondents do not have wills in place for emergency capital transfers. Even if the capital founder is advancing in age, 72% still do not possess a will.

For families worth up to $100 million, the contested rate for wills is 99.5% in developing markets and 78.7% in developed markets. Approximately 56% of assets and capital are at risk of legal challenges from third parties.

Wills are important, but only to a certain extent. In the modern world, detailed data is more crucial. Without detailed data to claim the asset, the will won’t assist in the transfer.

Professionals point out the problem of executing what is stated in the will, especially if the will needs to be executed across multiple jurisdictions. A safer option might be to make a separate “regional” will for some of your assets, though this is exceedingly rare.

 

CONCLUSION

Data on wealth transfers outcomes run counter to the common misconceptions of wealth owners and their families. They expect the process to be straightforward. They also underestimate how data-demanding is wealth transfer. 

These misconceptions lead to high failure rates. Typically, $340,000 per $1,000,000 is lost in the process of transmitting wealth from the founder to the next generation.

 

  1. Affluent families account for 75% of total losses in both emergency and planned intergenerational transfers.
  2. In 98% of cases, wealth-related documents or wills are outdated or non-existent.
  3. Fully 97% of wealth owners opt for unreliable methods to store information on family wealth.
  4. Only 6% of wealth owners have drafted or are in the process of drafting a plan for the transfer of wealth.

If you’re looking for more sustainable approaches to wealth transfer planning, consider consulting Owner.One’s services. It equips you with a high-end tech setup to overcome common obstacles in family wealth transfers, mentioned in the article.


 

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