Generational Wealth is a hot topic – but what exactly is generational wealth? Is it only for the wealthy – and how does one keep it? Here are five frequently asked questions about generational wealth.
1. What Is Generational Wealth?
Generational Wealth is wealth or assets that are passed from one generation to the next. Typically it’s from parents to child, but it could be from grandparents to grandchild. Wealth can consist of actual cash or can include stocks, real estate, jewelry, bitcoins or ownership of a business.
2. Is Generational Wealth Only For The Rich?
Generational Wealth is NOT only for the wealthy – in fact, the term ‘Generational Wealth’ is frequently used by people who are trying to accumulate wealth. Strategies for creating a generational wealth mindset include:
• higher education
• white-collar jobs
• global travel
• money management skills
• estate planning
3. Is All Generational Wealth Inherited?
No, in fact, much generational wealth is earned, not inherited. A significant amount of wealth does transfer from one generation to the next, and in fact, the greatest generational wealth transfer in history is about to occur. But for successful generational wealth, the current generation also should be actively working and contributing to the growing wealth for the next generation.
4. What Is The Role Of Estate Planning In Generational Wealth Management?
If you work hard to build a successful business, create a strong investment portfolio and accumulate valuable assets, you want to make sure your hard work is appreciated and protected. For generational wealth — also called family wealth or multi-generational wealth or legacy wealth — a strategic estate plan is the key to multigenerational wealth and a legacy plan that protects their assets for future generations.
5. I’ve Heard Of A Multigenerational Estate Plan – Is That The Same As Generational Wealth?
No, but they are similar. If you own a home, a business, stocks and bonds or other assets you may want to protect your wealth for future generations:
• Do you want to pay for your grandchildren’s college education?
• Is there a family vacation home you want your children to enjoy after you are gone?
• Do you have family members you want to protect from inheriting too much money, too quickly?
• Are there future, unborn family members you want to include in your estate?
It takes time to plan, create and execute an estate plan to protect and transfer wealth to the next generation. A properly executed multigenerational estate plan can plan for the next 10, 20 or 50 years – or even longer! An estate planning attorney can help protect your legacy and your family using inheritance and tax strategies such as a generation-skipping transfer trust, a gift trust and other types of trusts
Generational wealth takes years of hard work to accumulate – and sadly, without proper planning can take far less time to be squandered and lost forever!
Contact the experienced generational wealth at Estate and Probate Legal Group to discuss how to preserve your legacy for the next generation. Call us today at 630-864-5835.
AREAS WE SERVE: Cook, Dupage, Kane, Lake, and Will counties