Creating wealth is a remarkable accomplishment, but preserving it across generations is a different challenge altogether. Families who want to build a lasting impact must go beyond investment portfolios. They need a clear, cohesive plan to pass on not just money, but purpose, values, and financial confidence. Thatโs where multi-generational wealth planning comes in.
At RIA Advisors, we help high-net-worth individuals and families craft strategies that stand the test of time, ensuring that each generation can thrive while preserving the legacy built by the ones before. In this post, weโll break down the key components of building family legacy wealth, from trusts and education to governance and communication.
The 3 Pillars of Multi-Generational Wealth Planning
1. Strategic Structures: Trusts and Estate Planning
One of the most powerful tools for preserving wealth is the trust. Trusts offer control, protection, and tax efficiency, making them ideal for families looking to support multiple generations.
Some of the most common trust structures include:
- Revocable Living Trusts: Useful for avoiding probate and simplifying asset transfer
- Irrevocable Trusts: Help reduce estate tax exposure and shield assets from creditors
- Generation-Skipping Trusts (GSTs): Allow wealth to pass directly to grandchildren, avoiding double taxation
- Charitable Remainder Trusts (CRTs): Provide income to family while supporting philanthropic goals
Properly designed, these vehicles can ensure that wealth is distributed according to your wishes while protecting your heirs from poor financial decisions, legal risks, or outside influence.
Estate planning should also include:
- Updated wills and healthcare directives
- Powers of attorney
- Asset titling and beneficiary designations
Working with fiduciary advisors, attorneys, and tax professionals ensures these documents are coordinated and reflect your evolving life and family dynamics.
2. Education and Empowerment of Heirs
One of the leading reasons family wealth dissipates within two or three generations? A lack of preparation.
Studies show that 70% of wealthy families lose their wealth by the second generation, and 90% by the third. Often, this isnโt due to poor investment decisions; heirs werenโt educated or included in the planning process.
Avoid this by:
- Starting early: Teach financial literacy to children and teens
- Encouraging involvement: Bring adult children into family meetings with advisors
- Setting expectations: Be clear about what the wealth is for, and how it will be managed
- Creating a family mission: Tie your wealth to shared values or philanthropic goals
By prioritizing financial education, youโre not just transferring money, youโre transferring wisdom.
3. Family Governance and Communication
Even the best-laid financial plans can fall apart if a family lacks structure and open communication. Thatโs where family governance comes in, a framework for decisions, values are upheld, and disagreements are resolved.
Effective family governance often includes:
- Family meetings: Regular check-ins to discuss finances, philanthropy, or business interests
- Shared decision-making structures: Clear roles for who manages what
- Mission and vision statements: A guiding compass for how wealth is used
- Conflict resolution plans: Tools for navigating disagreements without division
Families who intentionally cultivate trust, transparency, and unity are more likely to sustain their wealth and relationships over generations.
Partnering With the Right Team
Multi-generational wealth planning is too important to leave to chance or to one advisor alone. You need a coordinated team that includes:
- Fiduciary financial advisors
- Estate planning attorneys
- Tax professionals
- Philanthropic consultants (if applicable)
At RIA Advisors, we serve as the central hub, coordinating these experts to ensure every part of your plan works together seamlessly. Our goal is not just to protect your money, but to protect your legacy.
Make Your Legacy Last
Wealth can be a reflection of your lifeโs work, values, and vision. With thoughtful planning, strategic structures, and family alignment, you can build a legacy that endures. Contact RIA Advisors today to begin building a multi-generational strategy that aligns with your familyโs unique goals and future.
FAQs
What is the biggest risk to multi-generational wealth?
The most common risk is a lack of communication and preparation. Without financial education and shared values, future generations may mismanage or misuse inherited wealth.
What is a generation-skipping trust?
A generation-skipping trust allows assets to pass to grandchildren (or further) rather than directly to children, often helping avoid double taxation on estates.
When should I start planning for multi-generational wealth?
The earlier, the better. Planning should begin once wealth accumulation starts, especially for business owners or families with growing assets.
Can I include philanthropy in my multi-generational plan?
Yes. Charitable givingโthrough donor-advised funds, foundations, or trustsโcan help align family members around shared values and offer tax advantages.
Do I need a family meeting even if my kids are young?
Yes, but it should be age-appropriate. Starting conversations early builds a foundation of trust and financial literacy that pays off as children grow.
