How you can help your family succeed for a lifetime

You’ve worked hard, planned carefully, and invested wisely–and now you’re ready to pass on your wealth to your family and loved ones and how to manage wealth for future generations. The next generation can do great things with their inheritance, but only if they understand how to use the money wisely and the importance of wealth management. You and your financial professional can help them develop the skills they need to make a one-time gift of generational wealth last a lifetime.

Setting clear objectives for your wealth is essential to creating a legacy through inheritance. As with so many things, the first step in this journey starts with open lines of communication. Let’s explore how to prepare your family to use their inheritance with purpose and create a pathway for your wealth to impact many generations.

Teaching the ABCs of Financial Literacy

Preparing someone to handle the generational wealth they will inherit responsibly is a gradual process and begins with fundamentals. Start with the basics–your financial professional has excellent resources to share that teach foundational financial principles of wealth management that will empower them to make good decisions with their inheritance.

Beyond the basics, it is important to discuss how your family approaches financial decision-making and wealth management. This is a great time to sit down and explore the investment and disbursal strategies you took and how they were successful. This way, your family can stay within your framework while you’re here and continue to grow and use the generational wealth they’ve inherited wisely after you’re gone.

Of course, there’s more to a legacy than just money. Now is also the time to introduce your loved ones to the trusted team with whom you’ve cultivated relationships. Invite them to meet your financial professional as well as any business associates on your wealth management team who might be helpful as they pursue their own goals and aspirations. If your connections can help them thrive, make the introduction now.

Establish a mentorship relationship now–being open to questions and willing to explain how you’ve succeeded- and pass this wisdom on. The knowledge you share will help your beneficiaries use their inheritance wisely, and can benefit them personally as well as financially.

Create a Legacy Plan

Now that your family is prepared to receive generational wealth, it’s time to discuss how you want to distribute your assets. Creating a legacy plan provides a clear roadmap for how you want to bestow your wealth and who should take an active role in that process.

The first step is to define the roles and responsibilities that each person will hold. You could delegate separate loved ones to handle different aspects of your legacy, such as charitable giving or managing business and educational funding to help family members, or you could entrust the majority of decision-making to one person. No matter what strategy you choose, discuss what you expect of these individuals, the roles they’ll play, and how important they are to your family's future success as they continue to grow and protect the family’s generational wealth.

Once you decide on responsibilities, it is wise to look at timelines and milestones. If you want your wealth to benefit multiple generations, the next generation must decide what to fund and when. Discussing this in person, rather than after your passing, allows you to impart your unique perspective on how your generational wealth can grow and impact others in the future.

This is also a great time to introduce your loved ones to your most trusted financial guides. Introducing them to the experts who helped support you gives them the power to continue your legacy.

Preparing Your Loved Ones

Nothing can replace the opportunity to mentor your loved ones in person. While your will may dictate the facts of your legacy, your family would much rather have your input now when they can ask questions and learn from you.

Try a test run–ask your family how they would handle certain situations. If a loved one needs a loan to start a new business, would they fund it? What parameters would they set for repayment? Which charities will they support with their inheritance, and how much will they give? Will they fund education for future generations? If so, are there funding requirements, such as choosing a specific major or school?

These hypotheticals open the door for valuable conversations about using generational wealth to make the most significant impact, not just today but for future generations. Based on this exercise, you can identify areas for growth and be confident that your family understands your wishes.

Guiding Generational Wealth

After your passing, your family will have a tremendous financial responsibility–to do good with everything you worked for. Prepare them to succeed with a carefully thought-out legacy plan for wealth management. With your financial professional, you can create a roadmap for success and give your family the most incredible gift–the certainty of your wishes.

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