Why Family Wealth Planning Is So Important

Intergenerational altruism. This term refers to caring and providing for the needs of future generations. Intergenerational altruism is a human quality that spans time and societies. In fact, more than 500 years ago, the Iroquois included in their Great Law of Peace a law that specifically directed the tribes to provide for their future generations: “Look and listen for the welfare of the whole people and have always in view not only the present but also the coming generations.”

Both in the past and present, providing for future generations is a concept most humans can get behind. We care about our children’s and grandchildren’s security and happiness. And people who inherit family legacy wealth have a considerable advantage over those who build wealth from scratch. 

 

The Advantages of Family Legacy Wealth

 

• One advantage is that people with inherited wealth don’t worry about higher education costs. They graduate from college debt-free, and they can put the money that would have gone towards paying off student loans towards other beneficial ventures. 
• Another benefit of family wealth planning is that the younger generations can purchase their first home much sooner and generate home equity wealth. And owning one’s home isn’t just financially beneficial; it’s a secure foundation and safety net that supports individuals and families as they expand their horizons.
• People with inherited wealth can also take advantage of high-risk/high-reward opportunities without worrying about repercussions from failure. If they want to start a business, they have the capital and the security to commit fully. If they come across a promising investment that requires a substantial buy-in, they can go for it without worrying about missed payments, penalties, or reducing their quality of life.  
• The higher quality of life continues into the golden years for future generations with access to family legacy wealth. They don’t have to worry about retirement planning and funds. In fact, “Many aging Americans are not prepared for retirement. In a 2019 report from the Insured Retirement Institute, 45% of baby boomers had zero savings and many planned to work well into their retirement years.” Forbes 

 

These are just several advantages that result when people follow a family legacy wealth plan and pass it on to their children and grandchildren.

 

Begin Your Family Legacy Wealth Plan Now

 

Clearly, passing a legacy on to future generations is a valuable and admirable endeavor. Yet people struggle with family wealth planning and are often unsure how to begin creating a family legacy wealth plan. 

 

Begin by articulating a family legacy wealth plan, possibly working with a financial advisor to ensure you’ve covered the bases. Also, start fostering a legacy wealth culture within your family, including aligning on long-term family wealth planning goals, establishing accountability, and facilitating financial stewardship training. Cornelius Vanderbilt, business magnate and self-made millionaire who bequeathed his son $100m, once said, "Any fool can make a fortune; it takes a man of brains to hold onto it." You don’t want mishandling of family legacy wealth to jeopardize your long-term, multi-generational plan.

 

Best Investment Opportunity for Buillding Family Legacy Wealth? Real Estate! 

 

Once you’ve got a handle on your family legacy wealth plan and goals, start looking for investment opportunities to generate wealth. Real estate is one of the first investment sectors you should consider, as it’s exceptionally effective at building family legacy wealth. Property is an especially productive asset that can generate wealth in multiple ways (equity, rent, etc.). We’ll dive further into why real estate is a critical asset in family wealth planning in an upcoming post! 

In the meantime, feel free to reach out to Leslie & the Key Performance Team to discover real estate investment opportunities and how they will help you with your family wealth planning!