Multigenerational Wealth Planning: Tips to Prepare Your Heirs for an Inheritance

multigenerational wealth
Picture of Scott Hohman, CFP®, AIF®

Scott Hohman, CFP®, AIF®

Generating wealth is one thing—multigenerational wealth planning is another. If you’re wondering how to prepare your heirs and ensure your inheritance lasts well into the future, get the info you need to make the most of your family wealth transfer.

Family Wealth Transfer Planning

The surprising truth is that all too frequently, inherited family wealth is gone within a few generations. A study found that most families—70%—lose their wealth by the end of the second generation, and almost all—90%—lose it by the end of the third. However, it’s not a lack of desire that’s the issue. A Merrill Lynch survey of families with more than $5 million in investable assets found that 70% of respondents both want their money to last beyond their lifetime, and had unreasonable expectations of how they’d make their money last, and for how long.

The single biggest contributor to failed family wealth transfers is what can be termed “family issues.” Of those surveyed above, 60% said their reversal in fortune was caused by a lack of trust and communication in the family. So, the question becomes, how can families build relationships that reinforce their wealth, rather than forsake it? Use these tips to help prepare your heirs and keep your hard-earned money supporting your family for the long term.

SEE ALSO: Tips for Discussing Money with Your Aging Parents


Start With an Open Discussion

If a lack of communication is often the culprit for the collapse of family wealth, it’s also a natural place to seek improvement. Gather around an actual or virtual roundtable to discuss your family’s vision of the future. Will you donate funds? Will you attempt to grow them? How far in the future are you hoping to sustain your wealth?

Wherever you’d like to go, the best thing to do today is to start the conversation about multigenerational wealth planning. The more honest and insightful you can be upfront, the better prepared your family will be for the generations to come.

Prepare Your Heirs—Secure Your Wealth

One of the biggest pitfalls that heirs of family wealth fall into is that they don’t have the tools and knowledge to properly manage what they’ve inherited. Oftentimes, this is because the older generations have taken the sole reins of responsibility and decision-making when managing family wealth.

It’s a smart move to fold in the younger generations early on. By including heirs in decision-making up front, you can teach them what they need to know about money management. By investing in their skills and instilling the family’s core values into the process, successors have what they need to become responsible stewards of the family fortune.

Uncover Your Family’s Unique Identity

A legacy of wealth isn’t just about money—it’s about values. Understanding who your family is, what makes you unique, and what responsibilities and choices lie ahead are all critical components to prepare your heirs.

Passing information along from one generation to the next now can pay big dividends in the future. These conversations can be a memorable and moving experience for both the family leaders as well as all the members of the next generations. Uncovering your family’s stories and history is valuable in and of itself, but when set upon the backdrop of inheritance, who your family is can show you the why behind the values you share and your vision for your collective future.

If you want to go a step further, creating what’s known as a Heritage Statement can be a powerful way to distill and pass along your family story. Heritage Statements outline who the family leaders are, how they built their estate, what their beliefs and values are, and how they hope the future generations will carry on the family legacy.

SEE ALSO: How to Raise Financially Independent Children


Get Together Often, and With Purpose

Family reunions conjure up images of barbecues and shared vacations, but families looking to retain multigenerational wealth should consider family retreats, too. Setting aside even just a few days every year with the explicit purpose of planning for the future is a smart time investment.

The goal of these gatherings is to promote togetherness, take a tactical approach to planning, and reinforce the family’s goals and ensure everyone is working together to achieve them. When a family is aligned in vision and strategy, each family member can have the tools, support, and means they need to live a fulfilled and meaningful life. 

If all this planning and facilitating feels overwhelming, know that you don’t have to go it alone. Some families benefit from hiring an external facilitator to help plan these events and make sure everything runs smoothly.

Spread out the Responsibilities

Diversifying responsibility can keep any given individual from feeling overwhelmed with the charge of managing the family’s wealth. Focus instead on creating collaborative managerial teams to cover the legal, tax, charitable, and other financial needs. Perhaps these are outside, impartial, responsible individuals, or perhaps they’re found within the family tree. This team approach can help make sure all the details are covered.

Multigenerational Wealth Planning: Your Family’s Financial Foundation

The tips above can serve any family, but they are especially important when your goal is multigenerational wealth planning. The best thing you can do is to take a considered, thoughtful approach to managing your fortune and preparing your heirs for a family wealth transfer.

If you’d like professional guidance, we can help! At Resolute, we take the time to get to know you and your family, your values and goals, and your wishes for your multigenerational wealth plan. Schedule a conversation with us today and learn more about how we can help you preserve your family’s financial legacy for generations to come.


The views expressed represent the opinion of Resolute Wealth Advisor, Inc. (RWA). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While RWA believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the RWA’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.

Never miss an update.

Sign up and get market insights, financial planning tips, and retirement planning ideas delivered right to your inbox.