You need to pass on something more than just funds. You need to pass on values.
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Right now, you may be in the process of amassing wealth. This could be in the form of stocks, bonds, or other investments, but you could be on your way to creating a large amount of funds to be used at your discretion. What you do with it is up to you, but if you’re looking at passing it on to your children, then you need to truly consider how you do so.
I’m not referring to the mechanics of the process; many blog posts have been written about how you can set up a trust or any number of other ways to pass down an inheritance. None of that matters if the recipient(s) don’t have an understanding of what to do with that money. For them to know, you need to pass on something more than just funds.
Really, it’s about values.
Focusing on the Future
As someone who helps families create generational wealth, I have heard a lot of stories. Do a quick search on “people who got rich and lost it all” and you’ll be assaulted with page after page of accounts where those who came into money watched it all go away.
Celebrities, heads of state, tech billionaires—they’ve all built up an obscene amount of money, then something happened. It may be a tragic tale, possibly hubris, maybe just stupidity, or some combination of all three. No matter how it happens, there’s one thing many people take away from reading those stories: “Boy, I don’t want that to be me.”
Your children, or whomever the recipients of your wealth may be, also shouldn’t fall into that category. But if you pass suddenly and they’re presented with thousands or millions of dollars without any guidance on how to use it, they will inevitably fail. It’s why so many lottery winners fall into that same category.
What you need to instill into those recipients is a sense of values. Not only your own but the ones that you feel are important when you have the kinds of funds at your disposal that they will have.
How to Pass On Your Values
In my book, Values Over Valuables, I talk about the kinds of questions I ask my clients:
Would leaving more money to your kids be better for them? Would you rather they live on what they earn or what they inherit? Should they work hard for their money, or should their money work hard for them? If you turned out fine without anyone leaving a fortune to you, why would you feel compelled to leave a fortune to your kids?
You should ask yourself these same questions. What is important to you personally and to your family? How do you want to live today, and how would you like your children and grandchildren to live in the future? What should they respect and how should they treat their money?
Whatever you choose, you need to pass those ideas down to your children by teaching them about those values today. You also have to live by those same rules because kids see and hear more than you may think, and they know the difference between talking about something and then ignoring it for one reason or another.
They will use those values to guide themselves along their own paths and make these decisions for themselves. These become a vision statement for your family, and that can last generations.
Keeping It Going
The key word in generational wealth is the first one: generational. For that to happen, your children or other recipients have to pass it down to their children and so on. The idea is for the money to transform multiple generations and give them the guidance they need to make the right decisions way after you have left the mortal plane.
My values may not be your values, and vice versa. How you decide what is important to you and your family is a decision that I cannot make for you. Whatever you do choose, continue to speak and live those values, and use them as your own rules to live by.
In this way, you can ensure your children and their children know what is important, and they will use their generational wealth wisely.
