Preserving Your Money and Property Beyond the Third Generation

Whether you have inherited your wealth or have built it yourself, you likely want to share this wealth with the next generation and beyond. 

The quotation “shirtsleeves to shirtsleeves in three generations” has often been attributed to Andrew Carnegie. The same concept has been echoed by other people and various cultures, with the underlying notion being that the first generation builds the wealth, the second generation spends the wealth, and the third generation rarely sees any of the wealth. We are committed to preparing estate plans that will disprove those words and provide for many future generations.

How an Estate Plan Protects Family Wealth

An estate plan puts your intentions into writing. Although the state where you live has a default plan for what happens to your money and property at your death (“intestate” laws), you can choose a different plan—you just need to put it in place. 

A “trust” can be a valuable tool when planning for the long term. Not only does a properly funded trust avoid the costly, time-consuming, and public court process known as probate, it also provides instructions for exactly what should happen to the money and property owned by the trust. The trust instructions can lay out who will receive the money and property, how much the person will receive, and when they will receive it. The trust instructions can also lay out what will happen to any money and property remaining after the first individual passes away. 

You can choose to create discretionary trusts for your beneficiaries to protect the money and property you leave for their benefit. Discretionary trusts allow the” trustee” to use their discretion to determine when and how much money and property to give beneficiaries. Because beneficiaries are not guaranteed a specific amount of money or a particular piece of property, the funds are better protected from any of the beneficiaries’ future creditors or former spouses and, consequently, preserved for subsequent beneficiaries. 

How to Get Started Protecting Your Family Wealth

Providing for multiple generations through your financial and estate plan is a significant legacy to leave your family. As previously mentioned, ensuring that it is done properly requires careful planning with experienced professionals. To take the next step in your planning, consider the following:

First, meet with your professional advisors.

• Your attorney can prepare your wishes and instructions in legally enforceable documents.
• Your financial planner can help structure your finances for growth and availability for future generations.
• Your tax professional can advise you on the short- and long-term tax consequences of any financial or estate plan.
• Depending on the type of estate planning strategy you use, your insurance professional can ensure that you have proper liquidity to provide money to future generations.

Second, consider having an honest conversation with your family. Talking about money can be a sensitive topic that stirs up many different emotions. However, to ensure that your wishes are carried out in the way you want, you should let your family know ahead of time what to expect. They will be instrumental in making sure that the wealth that they receive at your death remains available to future generations. If they know and understand your plan, they will be in a better position to honor your wishes.

We can help!

Our attorneys can help you with your multigenerational estate planning. For assistance with these and other business law, tax planning, or estate planning matters, contact our office today!

Legal Disclaimer – The information provided is designed for general information only and is not intended to be legal advice, nor does it create an attorney client relationship. Consult an attorney before making any legal decisions based on your individual circumstances.