Preserve Generational Wealth

Creators of generational wealth have many talents. People with a high net worth (HNW) have learned how to build businesses and create succession plans. They understand the importance of tax strategies to preserve wealth and estate planning to pass on that wealth.

However, stories abound of families that squandered inherited wealth. There is a good chance this occurred because HNW parents did not instill financial responsibility in their children. You can teach your children and grandchildren to preserve wealth by emphasizing the importance of establishing the following three factors:

Emphasize a Work Ethic

Whether you run a business or a foundation, your children need to understand the importance of a strong work ethic. Your obligation is to teach them everything you know. Their responsibility is to listen, learn and work. Wealth doesn’t happen by itself. It is created and preserved.

Create a Value Statement

A work ethic is only one value that has helped you accumulate wealth. You run your business, your charitable endeavors and your life by adhering to values and unwritten rules. Why not work with your children to put your values into words, incorporating their input where possible? A value statement gives your children a road map that provides clarity and certainty.

HNW individuals work as hard to transfer wealth as they do creating it.

Never Stop Communicating

Many high-net-worth families experience conflicts and even a wealth drain when they don’t communicate regularly. Communication is a two-way street, so be prepared to receive input as easily as you give it.

For example, communicate with your children regularly to learn about their skills and level of interest in your enterprise. If one child wants nothing to do with your organization(s), you can work with your financial professional and estate planning attorney to draft a plan to equalize your estate for the non-successor in your family.

From cradle to grave, your children can learn to live in ways that help ensure your estate is preserved for generations to come.