An Estate Plan Designed to Last For Generations

Design an Estate Plan that Will Last for Generations to Come

As the American expression “Shirtsleeves to shirtsleeves in three generations” goes, family legacies have long been haunted by the fear that future generations will mismanage their inheritances.

Now there is data to back up this expression. The Williams Group, a wealth consultancy firm, conducted a groundbreaking 20-year study of over 3,200 families and found that seven in ten families lose their fortune by the second generation, while nine in 10 lose it by the third generation. In other words, 90% of affluent families lose their wealth in three generations.

There are a variety of reasons why this happens:

  • Fragmentation occurs when inheritance is dispersed
  • Poor communication
  • Inferior estate planning
  • Generations are taught not to discuss financial issues
  • Younger generations take their wealth for granted

Regardless of the reason, business ventures, income, earnings and long-term investments long-term should be protected. Safeguarding your family’s wealth for generations to come, requires that you create a multigenerational estate plan that is focused on the future.

Are You Ready?

If you’re a HNWI, ensure that the wealth you create today is honored by future generations. With a few changes in how you approach your estate planning, bulletproof protection for your legacy can be created.

Perhaps the biggest reason wealth erodes over time is that estate plans are made one generation at a time. One way to counteract that loss is to be transparent about personal financial matters. By holding regular family meetings you can discuss things like money values and your financial visions for the future. Additionally, it is essential to communicate which generation has more income and assets. Taking these steps will make the execution of your trust and family estate plan easier.

It is important to educate younger generations about financial responsibility early on. If your children practice money habits in a safe environment, such as learning to save money from a part-time job, they will develop strong financial instincts as adults.

Setting up a trust is another way to ensure multigenerational fiscal integrity. A trust is a powerful legal vehicle that will protect your assets over the long term. Trusts can provide protections and tax benefits and work collectively with your will. You can also set up a trust fund for your children and grandchildren to include special stipulations so that your funds will be dispersed with certain conditions. Consider setting up a tax-advantaged account for education savings 529 Plan, or Uniform Gifts to Minor Accounts (UTMA/UGMA), and gift trusts as well.

Looking More Than a Decade or Two Ahead

HNW estate planning requires the guidance of an experienced estate planning attorney who understands multi-generational dynamics. At the Law Offices of Jeffrey M. Verdon in California, we offer comprehensive estate planning services designed for the affluent individual with assets of $10M or more. Our custom estate plans offer layers of protection and advanced tax structures.

Ensure your multigenerational wealth is executed properly. With the right financial and legal advice, your multigenerational trust can even grow with each generation. Give us a call today.

Posted in Estate Planning, Succession, Updates.