Strategies for Securing Generational Wealth: How to Pass the Torch Strategies for Securing Generational Wealth: How to Pass the Torch

Actionable Trade Ideas

always free

This article is intended for educational purposes only and is not legal advice. For guidance on your personal situation, please contact a lawyer.

The term “generational wealth” typically brings to mind those who are rich and famous. You can often see it used in association with families whose fortunes date back decades or even centuries, with the idea that they have so much wealth that the descendants of those who earned that wealth may never have to work for a living if that’s what they wish.

However, passing on assets to your loved ones and cherished causes transcends financial status. In other words, “generational wealth” is in the eye of the beholder.

The more money you have, the more you might need complex estate planning strategies. But for many of us, the most efficient path to sharing the wealth with our relatives includes the use of relatively simple legal instruments such as wills and trusts.

A pair of glasses atop a will document.

Image source: Getty Images.

Trustworthy Tools for Sharing the Wealth

Wills and trusts both serve as powerful tools for ensuring that assets are distributed according to the owner’s wishes. And while they differ, they’re not mutually exclusive. Working with a trusted financial advisor, estate planner, and/or tax attorney is the best way to determine what works for you.

A last will and testament is a legally binding document that outlines how an individual’s assets should be distributed after their death. It allows for the designation of beneficiaries, specifies how property should be divided, and can provide instructions for the care of minor children.

Upon death, though, wills often require the assistance of a probate court to move assets to heirs. That’s a public process, something to keep in mind should you go that route.

Commonly used revocable, or living, trusts, on the other hand, can be changed easily along the way and typically don’t require probate. They can make it much easier to keep your financial affairs private. And you can serve as your own trustee during your lifetime, remaining in charge of managing your assets while you’re still alive and able.

Two people at the counter in a coffee/bakery shop.

Image source: Getty Images.

Ensuring Your Legacy While Empowering Theirs

Regardless of your estate’s size, you can view sharing those assets as a privilege, a responsibility, and an opportunity. It doesn’t take billions or even millions to make a difference for the next generation, to open the door for an education, to a home, to a business opportunity.

Viewed this way, generational wealth isn’t just about the zeros in a bank account; it’s about the impact we make, and living trusts and wills can be inexpensive ways to ensure that the fruits of your labor benefit the people and organizations you care about most.

Whether you use a will or a trust or both, sharing your assets after you’re gone represents a continuation of values, traditions, and the hard work of previous generations. By taking the necessary steps to ensure that assets are passed down as intended, you can create a lasting legacy.

The $22,924 Social Security Bonus Most Retirees Completely Overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.