Turns out it's not about the money, after all.
Back in 2012, a large national company spent some time surveying Americans about what matters most to them when it comes to passing something along to future generations.
They asked about family stories, history, heirlooms, and money. Of course most people expected money, to matter most. After all, the survey was being conducted in the shadow of the Great Recession.
The survey results were shocking: Money didn't matter nearly as much as keeping the family history alive and well.
According to the survey:
- 86 percent of people considered baby boomers (age 47-66) said family stories were the most important aspect of their legacy
- 74 percent of people considered seniors (72 and older) agreed that family stories were more important than personal possessions
- Only 9 percent of people between 47 and 66 expected to inherit money that would significantly affect their financial well-being
- 77 percent of both groups said passing along family values and life lessons were more important than money when creating a legacy.
Money, it seems, doesn't matter as much as everyone thinks it does--especially when it comes to creating a legacy.
When the survey was released, it sent shockwaves through the financial planning industry, which had been built on the belief that people were more interested in protecting their wealth than their legacies.
Turns out the people wanted something different.
A different approach to financial planning
Who knows when the paradigm shifted. It could have been after people of all ages watched the Great Recession wash away much of what they had spent years obtaining--homes, jobs, careers, 401(k)s and plans for the future.
For many people, the only thing left standing in the Great Recession's wake was their family.
Retirement accounts were decimated. Jobs were lost. Retirement accounts diminished. Family remained--the people, the stories and the values that have been shared from generation to generation--and could be counted on to help people who had lost a lot find the strength to soldier forward.
People had thought that as long as they "played the game" and "followed the rules" everything would work out. But then the rules changed, bubbles burst and they discovered that it was their family--and family values--that helped them get through it.
They discovered something that author Nancy Mellon described in her book Storytelling & the Art of Imagination: "Storytelling gives us love and courage for life ... storytelling puts us in touch with strengths we may have forgotten, with wisdom that has failed or disappeared, and with hopes that have fallen into darkness."
Passing along your legacy through wealth and stories
Research shows that 60 percent of the time, a family's fortune is squandered by the children of the person who created the wealth. In 90 percent of the cases, it's gone by the time the next generation passes on.
The question is how can you keep this from happening to your family's wealth. The answer is multi-generational financial planning.
Multi-generational financial planning allows you to be very prescriptive about how you want heirs to handle wealth after you are gone. By being incredibly clear with your instructions and the reasons for your wishes--and starting the planning process early--you can help your family avoid the infighting and bitterness that often surfaces among surviving members of your family--and typically leads to the loss of the fortune.
Using multi-generational planning actually gives your heirs what they want (stories about how you achieved what you did) and what you want (the assurance that your legacy will be protected).
It takes communication, planning, and courage. And it makes it less about money.