Generational Planning

Are you living the life of your dreams with more money than you will ever spend? If that is you, then you are in the right place!

If you are like other people who have created or inherited wealth, you have a desire to leave your kids and grandkids better positioned financially, spiritually and with the wisdom to make their lives better than your own. If this is what you’re thinking, then keep reading…

The problem many people run into with wanting more for their kids and grandkids is that they spend time thinking about these things but do very little to make them actually happen. Some people actually live as if money, their beliefs, their values and their wishes are secret and don’t do much to organize and communicate them to their children or grandchildren.

If you are here, then I know you want more for your family. So what I am going to do is share a few ideas and even provide a checklist for you to get started on your generational estate plan.

First off, to leave a legacy and enhance the next generation, you must realize that living in scarcity and keeping your wishes from future generations is not going to work. An effective plan has to have communication; otherwise, you leave the next generation blind to your wishes. And then the worst thing happens: the pattern of scarcity and secrecy is repeated generation after generation. This is the legacy left by many who have accumulated or inherited wealth. Opportunity to make a significant impact on future generations is missed.

But this does not have to be the case for you. We have a lot of experience helping people like you think through and take action creating an awesome generational plan!

Let’s get started with a Generational Planning Checklist

Lists are great for getting stuff done and can be very helpful when it comes to generational estate planning.

  • Understand Your Cash Flow Needs
    The very first step is to know and understand your cash flow needs. In other words, how much money do you need per year to cover all your planned expenses from Jan 1 through Dec 31?

    You have to know this because the most important part of your generational plan is making sure you have what you need when you need it while you’re living!

  • Know Your Chronological Cash Needs
    This is taking into consideration big-ticket items that are separate from your regular cash needs. This would include such things as car replacements, home improvements, etc.

    You may think to yourself that this is unnecessary since you have more money than you need.

    Please don’t fall into this mindset. The building blocks of a generational plan are not about how much money you have.

    It is about strategically arranging your assets to make sure you are taken care of while you are living and to maximize the funding of your generational plan. Think MAXIMIZATION!

  • Adjust Your Exposure to Market Risk
    It may be tempting to keep striving for big market gains, but when you are thinking about generational planning, it is not the time to be taking unnecessary risks. Making the switch from accumulation to preservation is the smart choice.

    Be careful here! If you have never had your risk tolerance tested, then you will want to do this now.

    We have a tool in place to help you identify your risk tolerance. It’s free and you can have your answer in a minute or two.

  • Know Your Tax Exposure
    Taxes are a big part of your generational plan. Reducing or even eliminating tax liabilities should be a given.

    You don’t want to pay more tax than is necessary on your money.

  • Know Your Mindset
    In James Hughes’ book, Family Wealth, Hughes describes a reoccurring pattern of families creating wealth in one generation and transferring it to the next generation, who then consumes the wealth, leaving nothing for the third and future generations. He calls it Rags to Rags in three generations.

    The idea that someone creates wealth over a lifetime and, at their death, passes it to their kids without a plan for how the money is to be used does not make much sense.

    This mindset has no emphasis on educating family members about money, their beliefs, their values or even the giver’s wishes after they pass.

    Therefore, there is very little guidance given for what the receiving generation should do with the money coming their way.

    What is your mindset about generational planning? If you don’t know, we have a free mindset assessment you can take on 8 key areas of your planning.

  • Get Your Legal Work in Order
    Estate planning is essential to making sure your wishes are carried out once you leave this earth.

    Having legal work in place to bypass probate and keep your assets together is important for preserving and managing wealth.

    Other considerations for your estate planning are having someone lined up for healthcare and financial decisions in case you’re not able to act on your own.

  • Plan for Long-Term Healthcare
    You will want to evaluate your options for protecting yourself and your family from the high cost of long-term healthcare.

    Again, your tendency may be to assume you have enough money to go around.

    But let me remind you that it is not about accessing the money you have. It is about protecting and maximizing it.

What’s Next?

There is never a one-size-fits-all solution for how a generational plan is to be arranged. Family dynamics, their belief system and their financial situation will dictate the details of a plan. With that being said, the framework of a generational plan begins with the mindset of thinking beyond your death and accepting a broader vision for what is possible. It is abandoning the status quo of simply distributing assets at one’s death and making a move toward the development of a strategy that has each generation both creating and perpetuating wealth for future generations. It is a culture within each generation to accept the responsibility of educating and preparing the generations to follow.

This underscores the point that the catalyst for generational planning is not the wealth itself, but rather the mindset carried through the generations, which can preserve the wealth and create an opportunity for future generations. The “spirit of the gift” from one generation to the next is what makes the generational plan cohesive. It is the common thread that pulls the family together generation after generation.

If you’re not sure that you can do this on your own, I’m happy to help walk you through all of this. contact me to learn more about what I can do for you.

Questions? I’m Here to Help.

If you have any questions, I’ll be around to answer them – contact me anytime.

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