for Multi-Generational Families

When we reflect on what to do with our wealth as we grow older, we tend to first think about where our money will go after we pass. Recently though, more and more people are shifting their perspective on passing down their wealth from an inheritance-focused view to a more immediate, experience-focused one.

Instead of saving every available dollar for their estate, people are using some of those assets to fund unforgettable family vacations, meaningful experiences with friends, and other memories that last a lifetime. People are also investing in their loved one’s lives while living, offering to contribute more to wedding costs, housing down payments, and business funding.

For families with significant wealth, preserving this wealth from one generation to the next is often a central focus. And it’s a goal for good reason, as data shows that 90% of families deplete their wealth by the end of the third generational wealth transfer.[1]

Cultures around the world have come up with sayings to describe the process of families building—and subsequently losing—their hard-earned assets. In America, it’s “shirtsleeves to shirtsleeves in three generations”; in Italy, it’s known as “from the stalls to the stars to the stall again”; and in China, it’s “from peasant shoes to peasant shoes in three generations.”

The passing of a loved one is an exceptionally difficult time in life. It has been more than five years since my parents passed away, and at times the feeling of loss is so acute it catches my breath. I was honored to be their personal representative and executor, and had the time and experience to be sure their finances were well prepared for such a transition. Despite this preplanning, the process was still painful and cumbersome.