Generational Wealth Planning: A Guide to Growing and Protecting Your Wealth

About 70% of wealthy families lose their wealth by the second generation. Here's how to beat those odds, presented by  Laurence Hale, AAMS®, CRPS®. 

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Transcript

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Welcome to You and Your Money. Empowering you to reach your goals with tips to help you Plan Well, Invest Well and Live Well. I'm Jim Zahansky, principal, managing partner and chief goal strategist at Weiss , Hale and Zahansky Strategic Wealth Advisors. Today's episode features Laurence Hale, principal, managing partner and chief Investment officer at Weiss, Hale and Zahansky Strategic Wealth Advisors. Now on to today's topic. Okay. On to today's topic, generational wealth planning, a guide to growing and protecting your wealth for decades to come. We haven't talked about this before. What exactly does it mean to have generation wealth? Well, if you think about it, you know, people spend their years working to earn a living, and it's very common that people want to leave behind money for their kids or their grandkids. Investments, property, cash and even businesses that get passed down to future generation is what's known as generational wealth. So people are proudly behind a legacy and help their future generations be better off, of course. But there's an old saying regarding generational wealth to be wary of, and that is...shirt sleeves to shirt sleeves in three generations. Which really means that by the time wealth has been passed down for three generations, there often isn't actually much left of the wealth at all. Wow, Really? Is that actually true? Unfortunately, it is. A well-known study conducted by the Williams Group, a number of years ago, found that 70% of wealthy families lose their wealth by the second generation and 90% lose it by the third generation. So that isn't a guarantee though you planning well can do a great deal to help you and your family avoid becoming part of those statistics and developing a generational wealth plan, communicating with your loved ones, and working with a team of professionals who can give your wealth a better chance of lasting for generations to come. It makes sense that planning well ahead can make all the difference. But what does that process actually entail? How do you plan for generations? Well, that's a that's a good question, Wayne, And that actually brings up the first important step to take, which is to think very far ahead. The generational wealth planning is a bit different from estate planning, where you're typically thinking of just your spouse, your kids, maybe your grandchildren. In generational wealth planning the goals to ensure the ability to pass assets down to those family members who haven't even been born yet. And it can really be hard to try to consider their needs so far in advance and alongside the needs of family members that you already know and love. So it's important to make sure you keep top of mind as you plan and consider the best strategies for conserving your wealth over the long term. Is this concept of generational wealth planning something that you bring up to your clients? Do they have to ask you about it? Where does this enter the equation? Well, absolutely. It's something that we talk about with clients as appropriate. You know, every client has a unique situation and their own values and goals and desires. And typically generational wealth is a fair amount of wealth. You're talking millions of dollars, if not tens of millions of dollars or more. And not everyone has the same feeling around leaving a very long term legacy. So those that do, we get very involved with thinking about how to plan with them and take that first step of that long term visioning. Okay. So how do you get started on creating those strategies? So if you want your wealth to last for generations, it's crucial to first communicate your desires to your family. And this is possibly one of the most common mistakes that people make when passing down wealth. If you're going to make a generational plan for your wealth, you really need to make sure that plan is shared with those future generations if you want it to go smoothly. What about those people who may be nervous to talk about such a serious or touchy topic with their family? Don't imagine that might be difficult for many people to begin that conversation. You know, Wayne you're right to some degree, but you're definitely your family best resources for wisdom and guidance when it comes to this. So don't make the mistake of thinking that talking about money somehow taboo or tasteless. It could be difficult in some respects. That's definitely for sure. But it's also necessary and responsible thing to do for everyone. And it's very important to take the time to educate your children and grandchildren and share your vision with them so that they aren't left feeling confused, frustrated, or really having no idea what your plans are. So Laurence once you've made your wishes clear to your family, then what do you do? Well, the next step is really to put your plan fully into writing your heirs are the ones who are going to be the ones carrying out your plan after you're gone and having a written roadmap on what should be done will relieve them of any potential doubt or confusion of your wishes. Make sure you specify how the money should be used, how it will be accessed, and how it will be replenished, and at this point in the process would be very beneficial to work with a wealth management professional because he or she can help to ensure the best strategies are in place for achieving those long term goals. That brings us to the end of this episode. As always, thanks for listening to You and Your Money and find even more episodes, videos and other resources at our website. whzwealth.com. Be sure to come back next week for more tips to help you live fearlessly and pursue your financial and life goals. Until then, live well. Weiss, Hale and Zahansky Strategic Wealth Advisors offer securities and advisory services through Commonwealth Financial Network member FINRA/SIPC, a registered investment advisor. Fixed insurance products and services offered through CES Insurance Agency. They practice at 697 Pomfret St, Pomfret Center, Connecticut 06259 and can be reached at 860-928-2341. Weiss, Hale and Zahansky Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strive to support clients in achieving their financial life goals. For more information regarding wealth management and customize financial planning with Weiss, Hale and Zahansky Strategic Wealth Advisors, please visit. www.whzwealth.com.