Protecting existing assets, such as money, a business, properties, and stock market investments is an important way to ensure your wealth is passed down to future generations. With proper financial planning, heirs will benefit from the hard work and fiscal responsibility you practiced in your lifetime.
Along with affording a comfortable lifestyle or status, wealth you leave to your children and grandchildren can increase their ability to be successful through advantages such as access to a quality education. But how long does family wealth last? How many future generations will be able to benefit from the money you have saved?
There are More Variables than Just Wealth
Most social scientists who have studied how long family wealth can last agree that the average length of time it takes for a family’s wealth to dissipate is three to five generations. Many variables can affect the average, such as the amount of wealth and family size, but your forethought and generosity can go a long way toward helping future generations get a leg up on life.
Knowing that you can make such a significant impact on the lives of your family members is exciting, but be aware, how much you’re able to pass down depends on more than practicing excellent money management.
The United States is the most litigious country in the world by a landslide, which means the risk of a legal attack may come at any time. A lifetime of work and smart investing can be erased if your estate is wiped out by financially devastating lawsuits.
Where to Start
In this day and age of modern money solutions, make protecting generational wealth a priority from falling prey to legal trouble. Particularly if you have a high net worth, safeguarding your estate through the use of an asset protection trust can accomplish this goal.
An asset protection trust (APT) is a financial planning vehicle that holds an individual’s assets in order to shield them from risk. APT is the most powerful estate protection you can get against lawsuits and other judgments. When properly structured, the grantor is the designated beneficiary and the trust is not accessible to creditors.
Throughout your lifetime, engaging in smart financial planning should always include an element of risk management. Practicing the same principal with your estate will ensure your legacy stays intact for the generations to come.