Families can continue their legacies and ensure buy-in by adhering to best practices when it comes to
multigenerational wealth planning.

Key takeaways:
● Multigenerational involvement is important so that all beneficiaries are on the same page and
wealth and legacy are preserved.
● Both partners should be involved, as should any children, so that everyone understands both the
wealth management plan that is in place and family values and goals.
● Key considerations include opening the lines of communication, obtaining multigenerational
buy-in, and creating a legacy beyond money.

Every family has its own values, behaviors, goals, and practices related to money. Multigenerational wealth management requires communication and collaboration to help a family both secure its wealth and protect its legacy. Proper coordination ensures that future generations are aligned on how to continue this legacy with financial management best practices, and that intentions will be met when the
time comes to pass down the family’s wealth.

This guide covers why multigenerational involvement is important as well as key considerations for ensuring the process is as smooth as possible.

Why multigenerational involvement matters

Wealth management can and should be a family affair. Involving spouses and children ensures that everyone is on the same financial page, both now and in the future. Couples who set wealth goals together have a far better chance of achieving them than if one partner dictates the plans and the other follows, for example, and can keep each other in check if one partner wants to take drastic action during times of volatility. Involving everyone also ensures that both partners have comprehensive knowledge of the wealth management plan should one outlive the other.

It is also helpful to include any children in financial planning. Parents should talk to them about money, its importance in daily life, and how to effectively manage it. They should include their children when setting a family savings goal – such as an around-the-world cruise, African safari vacation, or the purchase of a vacation home – and in charting its progress. Families can together brainstorm ideas for exactly how to reach the goal, such as earning extra money or cutting back on expenses. Instilling financial wisdom from an early age will set children up for a lifetime of smart money decisions.

How to create a smooth multigenerational process

Financial matters can be sensitive, especially within a family. Multigenerational wealth management must be intentional, strategic, and collaborative to be successful. These key considerations will help families ensure a smooth, successful process:

1. Opening the lines of communication

Speaking with the family’s financial advisor is an essential, if sometimes overlooked, consideration in crafting a multigenerational wealth plan. The only way such specialists can effectively execute a client’s vision is to have in-depth conversations about family, legacy, future plans, and the roles everyone will play.

Communication within the family is just as important because it allows beneficiaries to be on the same page about the legacy they can expect to receive. It also enables them to begin thinking about the legacy they will be able to leave. Giving beneficiaries the opportunity to ask questions and share their perspectives makes everyone feel like they are part of the team.

Here are a few tips for having these conversations:

● Have a clear vision.
Think about what wealth means. Travel? Philanthropy? Education? What are its dangers? Spoiled
children? Wasting money?
● Articulate that vision.
Make sure children, trustees, and advisors all share this vision and understand the family’s short- and long-term goals. Expectations should be recorded so that there are few, if any, missteps.
● Get everyone involved.
Everyone should walk through how the family’s resources are structured and used. Parents could consider setting aside a small pool for the kids to use for their own philanthropic passions. Children, particularly teenagers, should be encouraged to do the research, monitor the funds, and report back on their impact.

Family wealth advisors can go over additional tips to ensure everyone is aligned as the family progresses through its wealth preservation and management process. Some conversations will be tough, but communication is key. The more it happens now, the easier it will be to make the tough decisions later.

2. Obtaining multigenerational buy-in

Better communication and more transparency will help the family obtain buy-in across the board. This is critical to ensuring that the plans parents are laying out now will be followed and respected in the future. A few ways to ensure that multiple generations buy into the plans include the following:

● Discuss the reasoning for any decisions.

Children and other beneficiaries may want to know why a decision was made. Families should talk through reasoning so that everything makes sense.

● Give people a chance to ask questions.

Multigenerational wealth management should be a learning process. Beneficiaries should be given the time and space to think through plans and goals and ask questions along the way.

● Emphasize purpose and story.

Beneficiaries should know what the family’s wealth management goals are, but also how they help the family keep their story alive. How will this plan help keep the legacy going? What is most important to preserve regarding the family’s history?

Being clear about the why behind financial planning will make it much easier for multiple generations to actually buy into the strategy and take steps to support it.

3. Creating a legacy beyond money
The financial wellness left behind is important, but how the family will be remembered also matters. Wealth managers are specialists at assisting families in planning their financial legacies, what about the intangibles that go beyond money? What impact will investors have on their families, their country, or the global community?

Here are a few of the key components that go into legacy planning:

● Values
This is what an investor believes in or what keeps them going each day. A personal legacy statement or joint family mission statement can be valuable in laying out what is important and will then serve as a compass on this journey. Which values does the group share? How can those values help the larger community?

● Shared experiences
This includes all of a person or family’s shared memories that could impact how they are remembered. Which events or customs have deep meaning? How can they be remembered and preserved? A handwritten letter or even a social media post is a good starting point to creating a family legacy.

● Roots
This includes research into a shared genealogy, and that can strengthen family bonds. Every new picture, newspaper clipping, or previously unknown story adds to the tapestry of those still living. These roots help anchor a person’s legacy for the next generation.

A family office can be a useful tool to manage a non-financial legacy, particularly for high net worth individuals (HNWIs). It helps manage financial assets and non-financial affairs as well, so it may be worth considering for a family’s legacy project. Your financial advisor can walk you through whether any of these strategies might be a good fit for your multigenerational wealth management and preservation plans and goals.

Finding the right advisor

Wealth management, especially multigenerational wealth management, is no small matter. Ensuring buy-in, keeping communication open, and aligning plans to family goals and values are all important steps for a successful process.

Families need the right support and guidance when creating their plan and getting everyone on board. The team at Lindberg & Ripple is ready to help parents and families manage this process. Contact the wealth management specialists today to get started.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Lindberg & Ripple Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.

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