Multi-generational wealth planning helps ensure that a family’s wealth and legacy are properly managed and passed from one generation to the next. It requires a family to tackle the personal issues that determine who should benefit from the wealth, the tax hurdles that stand in the way of its efficient transfer, and the capital markets uncertainties that make it challenging to prudently invest.

Studies routinely report that more than half of wealth transfers fail, not because of the quality of estate planning advice, but largely due to issues of trust and communication within the family. At CapWealth, we work with our clients’ families to align their values, identify areas of common vision, and set future priorities.

A Modern Approach to Estate Planning

With a very high federal estate and gift tax exemption, many people believe that estate planning is less important. Actually, with all but the very wealthy not having to concern themselves with the federal estate tax, clients are able to focus on a wider scope of non-tax issues. To name just a few, issues include how to:

  • Protect assets for children when one spouse dies and the surviving spouses re-marries.
  • Provide for a child with special needs.
  • Give an executor access to digital assets while limiting certain access for privacy reasons.
  • Care for a pet when the caregiver dies.
  • Balance the inheritances for children based on different circumstances.
  • Transfer a business to the next generation or sell it to a willing buyer.

Based on open communication between family members, our multi-generational planning aims to:

  • Discern core family interests, traditions, and beliefs.
  • Identify talents, aspirations, and communication styles of each family member.
  • Define “wealth” in terms beyond just financial wealth.
  • Give voice to senior generations so they can pass on life experiences and stories.

3 Revealing Questions

There are many questions that help reveal a client’s priorities. Three that we like to ask are:
1. Done well, what do the next 5-10 years of your life look like?
2. What are the values you want to preserve and promote in your family and community?
3. What are the experiences you’ve had that have made you the person you are today?

Legacy Letters

One powerful tool we sometimes suggest is what we call a “legacy letter.” Unlike a will, a legacy letter is not a legally-binding document, but rather an expression of what you want your family to know and understand. In some cases, it is meant to be distributed after its author dies. But it can also be given at any time during one’s life. It may include your views on moral issues, or may simply explain some of the decisions you’ve made, and why you made them. It’s an evolving statement using your medium of choice (writing, recording your voice, or video), and different letters can be given to different people. Invariably, a legacy letter is a gift – to those who care about you, but also to yourself. It almost always leads to personal revelations and feelings of gratitude.

At CapWealth, we understand that building and maintaining wealth is about more than living comfortably today; it’s also about leaving a lasting legacy for those who matter most.

CapWealth and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.