You worked hard your entire life to build your wealth. At times you made difficult decisions, passed on purchases, all in an abundance of caution with your money. All along you’ve likely focused on these key objectives:
#1: Don’t run out of money.
#2: Pass as much wealth to the next generation as you can.
If this sounds familiar, keep reading, you may be unknowingly putting your legacy in jeopardy.
Successful intergenerational wealth transfer does not occur on its own. It requires clear purpose, a manageable plan, and well-drafted estate documents. Having tackled these procedures most money will successfully transfer to the next generation. But, successfully transferring money to the next generation does not guarantee the money will survive and create the legacy you had dreamed of. In most cases, something more is needed: good communication.
The Allegiant Private Advisors team recommends several tips to help communicate your legacy surrounding money to the next generation. You can start by tackling these topics:
Communicate how your family wealth was built.
Each family has a different story. Some came from nothing, struggled throughout life, but were able to build significant wealth. Others had money passed down from generation to generation. Whatever your story with money is, it’s important that the next generation understands the path the family took to build its wealth. Otherwise, it is unrealistic to expect that they will successfully continue the legacy you desire to create.
Talk about the big financial decisions that changed your family’s path.
Throughout life, we are all required to make significant decisions about money. As we do, our financial wisdom increases. That wisdom has significant value and can provide the next generation a significant leg up. Think of some of the important money decisions you have had to make. Were they good decisions or bad? Knowing what you know now, what would you have done differently?
Convey to the next generation who your trusted thinking partner was on financial decisions.
The world of finance has changed over the years. Did you have the right financial advocates by your side to help guide you in your decisions? Or, did you receive bad advice along the way? A fiduciary wealth advisor team who always has your best interest in mind can span generations and help create continuity.
Describe how you would like the next generation to use the money to improve their lives.
Handing money to your children free of restrictions may be your primary objective. But what if that money did not create happiness? What if it created a burden? Your experiences with money can help your family make decisions after you are gone. This does not mean you have to rule from the grave. Properly communicating ways in which the money can improve lives will help guide them in their decisions. Maybe this means using the money for special family trips, donating to charity, paying for education, etc. It’s your story to write, but once you write it, communicate it!
Share the financial principles you used to build and manage your wealth.
Most likely you did not build your wealth by chance. You had certain principles you lived by. What a gift it would be for you to share those principles with the ones who will be continuing your legacy.
Having a well-designed estate plan is your first step toward success. But, don’t stop there. Create a plan to communicate your desires, wishes, wisdom, and guidance to the next generation so that they can more effectively benefit from your legacy.
The Wealth Advisors at Allegiant Private Advisors routinely converse with families about intergenerational wealth principles. As fiduciary advisors and “thinking partners,” we can help guide you through these discussions and provide continuity throughout the process. Whether it is supporting a surviving spouse or guiding future generations on wealth, Allegiant provides your family peace of mind.
Communicating these ideas, having a plan in place and working with the right advisor for you and your loved ones can help ensure your money survives and helps the next generation thrive. Your money. Your legacy.
*Allegiant Private Advisors is located at 240 South Pineapple Ave., Suite 200, Sarasota, FL 34236. For more information, call 941-365-3745 or visit allegiantpa.com. Advisory Services offered through Commonwealth Financial Network, a Registered Investment Adviser.