After a lifetime of successful earning, it all comes down to the family legacy you’ll leave behind. How are you protecting yours?

 

You may have heard the old Chinese adage: “Wealth never survives three generations.”

While it may seem like nothing more than a cautionary tale, in practice, passing family wealth from generation to generation is a much more difficult task than most of us anticipate.

At David Adams Wealth Group, we pay particular attention to preserving family legacy because, when managed correctly, wealth should help you invest forward — not disintegrate over time.

 

The Family Legacy Problem

Current research shows 91% of family wealth transfers fail by the end of the third generation.

The most common reasons we fail to pass on our wealth often stem from: a lack of meaningful communication, family discord, and the destructive mentality of entitlement.

“It’s more than transferring wealth,” explained President and CEO David Adams. “It’s about transferring the values and legacy that accumulated that wealth in the first place.”

 

5 Reasons We Lose Our Family Legacy & Wealth

 

  1. Lack Of Meaningful Communication

It’s easy to get swept up in money talk. Engaging in structured, productive dialogue about the components of a lasting family legacy, however, requires more planning and preparation than most people expect. At David Adams Wealth Group, we encourage conversations about the intangible values of family legacy.

“We typically guide and mediate those conversations in our office, by inviting multiple generations to the table at one time,” David explained. “Then we can have those conversations about the bigger picture.”

 

  1. Lack Of Shared Vision

Unless you establish a shared vision for your wealth, it’s likely each family member will spend the money according to his or her own plan; yet, that kind of aimless spending could lead to the deterioration of family legacy and wealth over time.

In our practice, we help each family member understand the purpose of his or her wealth, so you can arrive at these decisions as a family — and protect them together.

 

  1. Disregard For Intangible Wealth Assets

Most families fail to focus on the intangible assets — such as philanthropy, higher education, community involvement, a perspective of gratitude, and impactful life experiences — because you can’t easily measure the contribution of these assets with numbers.

At David Adams Wealth Group, these intangible assets are at the center of our family legacy planning. When the conversation becomes too focused on wealth, we bring everyone back to the meaning behind the money.

 

  1. Erosion Of Trust

When there’s wealth to be shared, there’s often trust to be lost. Communication and transparency are crucial in creating the kind of trust that binds a family together — rather than the secrecy that tears a family apart. While that doesn’t mean you need to disclose everything immediately, these conversations help family members feel like they can trust your plan for the future, so they are much more likely to honor it.

 

  1. Attitude Of Entitlement Over Gratitude

When you’ve spent a lifetime generously providing for your family, that level of comfort can also come hand-in-hand with a decrease in productivity and motivation in the next generation. If you pass on your work ethic alongside your wealth, however, you are much more likely to ensure the survival of that wealth.

“In our practice, we discuss how to create the motivation and work ethic our clients used to amass their wealth in the first place,” David explained.

 

Start Protecting Your Family Legacy

If you’re struggling with communication, trust and the transfer of values, the team at David Adams Wealth Group can help you start a new dialogue and establish a framework that protects these powerful conversations for generations to come.

 

We can help. To set up a consultation with one of our Wealth Advisors, please call our office, at 615-435-3644.