Multigenerational Estate Planning


If you’ve worked hard to create wealth for yourself and your family, you may want to consider multigenerational estate planning. One of the most important things you can do to protect your family’s long-term financial health is to plan for future generations. According to Forbes, only 10% of wealthy families retain their wealth past three generations – luckily, proper multigenerational estate planning can help mitigate the risk of loss.

Most estate plans don’t consider future generations; they only consider their immediate heirs. However, the longevity of your wealth must be a top concern in your estate planning if you want to create multigenerational wealth. Rather than leaving an instantaneous windfall to your loved ones, your estate plan should ultimately act as a guide to oversee the administration of your assets for years to come.

Generational Wealth and Why It’s Important

Generational wealth begins when one family member accumulates enough wealth throughout their lifetime to pass it down to the next generation, typically through a trust or a will. The younger generation might then use the money to create more wealth and leave it to their own kids, creating multigenerational wealth. Building wealth with the intention of passing it down to future generations is important because it can enable long-term financial security and help your loved ones live a comfortable life, in addition to leaving behind a lasting legacy.

If you put a lot of effort into building wealth for your family, you also need to consider how to secure that fortune beyond the lifetime of your immediate successors. Proper estate planning can help prevent future generations from losing the bulk of their wealth to either careless financial decisions or hefty estate taxes. 

Communicating Long-Term Financial Goals

Family estate planning is a process that allows you to identify potential risks and challenges your estate may face and create plans to navigate those situations while suffering minimal losses.

Teaching younger generations financial literacy is an essential component of multigenerational wealth planning. 

Your future heirs will develop sound financial habits as adults if they are educated in a secure atmosphere while they are young. When you teach kids financial literacy, they grow up to be adults with healthy financial habits — this allows them to not only preserve inheritances but could potentially encourage them to grow the initial wealth bequeathed to them. 

Now also is the ideal time to set a good example for your family when it comes to financial transparency, despite the initial awkwardness. We have been socialized to feel that discussing money in certain circles is distasteful and rude. Your parents may have even instilled the idea that discussing personal finances is forbidden and should not be done at the dinner table or in other social situations, but this perspective can be problematic when trying to establish multigenerational wealth. 

Practice being a leader in your family by having honest discussions about the family estate and financial values. Make sure you offer ample opportunities for younger family members to practice talking about money and introduce them to the idea of wealth planning at an early age. 

Putting ideas into action is the third step in creating family wealth, and planning for our elders’ financial futures is just as important as planning for our children’s.

Creating and Communicating the Estate Plan 

If you have planned for multigenerational family wealth, a well-written estate plan will act as the legal foundation to ensure that your plans are carried out, especially if you are no longer around to see that they are successful. To begin with, a will can be used to express your final intentions. You can also add supporting documents as a part of your estate plan, though they might not be legally binding. You may, for instance, create a thorough document that outlines your financial principles and family history. This additional information can paint a clearer picture of how you envision your legacy to be carried out.  

While many people may recognize the importance of drafting a will, most don’t realize that communicating the details and your intentions can be just as important. Your will serves as a declaration of your final intentions, but it won’t always tell your family why you made certain choices. It can be difficult to broach the subject of estate planning with family members, and many people avoid it. But by delaying this discussion, you run the risk of leaving the result up in the air. Imagine yourself in a situation when a tragic accident occurs, and you haven’t told your family about your estate plan.

According to numerous surveys, around 70% of high-net-worth families fail to pass on their money beyond the second generation, and 64% of wealthy people share very little information about their financial condition with their offspring. Researchers also revealed that 25% of failed wealth transitions were ascribed to “inadequately prepared heirs,” and 60% were blamed on poor communication.

These figures demonstrate that major communication and planning gaps can affect families and their finances for generations to come. You undoubtedly want to leave a better financial future for your loved ones. You run the risk of leaving behind family strife, emotional scars, and legal problems if you don’t talk to your family about your estate plans and the purpose of your final requests.

A family meeting to discuss estate plans should start with an agenda. Make an effort to establish a relaxed, quiet, but orderly environment. Clarify your wishes with your family and other heirs and respond to any inquiries they may have.

Although it may not be simple, having this talk now to make your intentions and wishes clear helps to avoid family conflicts and misunderstandings after your passing, when emotions are likely to play an even larger role.

The presence and location of your will, living will, powers of attorney, insurance policies, and lists of your possessions, investments, and accounts, among other estate planning papers, should be covered in your conversation. It would help if you also let your family know what’s in any safe deposit boxes, where they are, and where to find crucial documents like birth or marriage certificates. Additionally, your relatives will find it very valuable to have the contact information of everyone involved in your accounts and estate when settling your estate.

Family members must be given a chance to voice their concerns and ask questions, particularly in relation to their roles in the administration of the estate. It is crucial that the individuals you have been designated to act as your numerous representatives throughout the settlement process are at ease and competent.

When your children or other heirs are aware of what to expect after your passing, they will be better equipped to handle both the emotional and practical sides of handling your estate. While you are still able to speak for yourself, a family meeting or even one-on-one dialogues might offer helpful chances to mend any existing family rifts.

Another strategy to get your heirs ready for the estate settlement procedure is to make sure they are financially educated. It will be easier to prevent speculation and communicate your genuine objective if people understand the legal and financial tools you have employed and why those particular vehicles were chosen. This is because your true intent might not be clear when translated into legal and financial jargon.

The attorneys at Kalicki Collier can assist you if you have not yet taken the time to plan how you will successfully pass your wealth to your family or other heirs, including communicating your estate plan to them. If you’re looking for estate planning in Reno, NV, Kalicki Collier is the office for you. Visit our website and contact us today to learn more. 

Scroll to Top