Ultimate Guide to Multigenerational Wealth

Want to secure your family's financial future for generations? Here's how. Multigenerational wealth isn't just about money - it's about creating a legacy of financial stability, values, and knowledge that lasts. But did you know that 90% of families lose their wealth by the third generation? To beat these odds, follow these key steps:

• Build wealth: Start with a strong financial foundation - budgeting, saving, and investing consistently.
• Protect wealth: Use diversification, tax-efficient strategies, and tools like trusts to safeguard assets.
• Transfer wealth: Plan ahead with wills, trusts, and family governance to ensure smooth inheritance.

With $84 trillion in assets set to transfer from baby boomers in the next two decades, now is the time to act. This guide breaks down everything you need to know - from saving and investing to teaching your family about money. Ready to build a legacy that lasts? Let’s dive in.

Building Generational Wealth: The Basics

Creating a Strong Financial Foundation

Before families can build wealth that stands the test of time, they need a solid financial foundation.

This begins with understanding your cash flow. A well-structured budget is key - divide your expenses into fixed costs, contributions toward financial security, and discretionary spending. Knowing where your money goes helps you take control of your finances.

Next comes managing debt, particularly high-interest debt. For example, credit card debt with interest rates exceeding 20% can cost a borrower $2,000 annually on a $10,000 balance. That’s money that could instead be invested to grow wealth. High-interest debt acts like a weight, slowing down financial progress, so tackling it should be a priority.

Another cornerstone of financial stability is an emergency fund. Aim to save enough to cover three to six months of living expenses. Unfortunately, nearly half of Americans - 48% - would struggle to cover their expenses for 90 days if they lost their income, and 33% have no savings at all. As financial expert Rachel Cruze explains:

"An emergency fund turns a financial crisis into an inconvenience."

Building this safety net takes discipline. Many families automate their savings through paycheck splitting or recurring transfers, treating these contributions like any other essential bill. Once this foundation is in place, you’re ready to focus on saving and investing with purpose.

Building Consistent Savings and Investment Habits

With a stable financial base, consistent saving and smart investing become the engines of wealth creation. The secret lies in regular contributions that grow significantly over time.

Tax-advantaged accounts should be a top priority. In 2024, families can contribute up to $23,000 to a 401(k), with those aged 50 or older eligible for an additional $7,500 catch-up contribution. These accounts not only provide immediate tax benefits but also allow your investments to grow tax-deferred over decades. Historically, the U.S. equity market has delivered an annualized real return of 6.5% since 1900, making it a reliable long-term wealth-building tool.

Equally important is developing the right mindset. As Morgan Housel, author of The Psychology of Money, puts it:

"His skill is investing, but his secret is time."

Consistency is often the biggest challenge for families, but automation can help. Setting up automatic transfers to retirement accounts, savings goals, and investment portfolios eliminates the need for constant decision-making. Diversifying investments across different asset classes and regions further reduces risk and helps manage market ups and downs.

Using Financial Tools to Track and Optimize Wealth

Once you’ve established financial stability and good saving habits, technology can help you manage wealth more effectively. The right tools provide a clear view of your entire financial landscape, making it easier to stay on track.

Comprehensive tracking is especially helpful for families with accounts spread across multiple institutions. Platforms like Maybe Finance allow users to link accounts from over 10,000 institutions, offering a unified view of assets. For families with international investments or global business interests, features like multi-currency support are invaluable.

Modern tools also leverage AI-powered insights to uncover opportunities you might miss. For instance, they can analyze your spending, investment performance, and goals to suggest improvements, such as tax-loss harvesting or rebalancing your portfolio to maintain your desired asset allocation.

As your family's financial situation becomes more complex, look for tools that can grow with you. Simple budgeting apps might be fine for basic needs, but managing multigenerational wealth calls for advanced features like investment tracking, goal-based planning, and the ability to manage finances for multiple family members. Maybe Finance even offers an open-source option for families wanting complete control over their financial data.

Finally, regular reviews and rebalancing ensure your wealth-building strategies remain effective. Markets fluctuate, family circumstances change, and financial goals evolve. Successful families schedule quarterly or semi-annual reviews to assess progress, refine strategies, and make sure their tools are still meeting their needs.

Shaw Pritchett, President and Wealth Advisor at Jackson Thornton Asset Management, underscores the importance of planning:

"Even if you create the wealth, without a plan, it can be challenging to know how to get it to the next generation in a way that allows it to grow."

How to Grow and Protect Your Wealth

Once you’ve established a strong financial foundation, the next step is to grow and safeguard your wealth. This involves smart investment strategies, leveraging tax benefits, and, in some cases, pooling resources with family members. Let’s explore these approaches in detail.

Diversifying Investments for Long-Term Growth

Diversification is key to managing risk and ensuring your wealth weathers market ups and downs. Instead of putting all your money in one place, spread your investments across different asset classes, industries, and regions. This reduces your exposure to specific risks and helps stabilize your portfolio over time.

Start by diversifying across asset classes. A balanced portfolio often includes a mix of stocks for growth, bonds for steady income, real estate for inflation protection, and commodities to add an extra layer of balance. Jamie Viceconte, Head of Investment Product at Citizens Wealth Management, explains:

"Diversification is a strategy intended to help ensure that you are not overly concentrated in a limited number of asset classes. This can help to reduce portfolio volatility while capturing market returns over time across asset classes."

Adding geographic and sector diversification strengthens your portfolio even further. For example, foreign stocks and bonds can offset risks tied to the U.S. economy, while investments spread across multiple industries protect against sector-specific downturns. Consider the Johannpeter family, who expanded over 65% of Gerdau's business outside Brazil by 2002, turning it into a global steel production powerhouse. Similarly, the Ayala family in the Philippines built lasting wealth by diversifying into real estate, finance, telecommunications, and utilities.

Don’t overlook alternative investments like REITs, commodities, or other specialized assets. These often have little correlation with traditional stocks and bonds, offering added stability during market fluctuations.

Lastly, make rebalancing a regular part of your strategy. Adjusting your portfolio quarterly or semi-annually ensures you maintain your desired risk level and can lock in gains from outperforming investments.

Beyond diversification, tax-advantaged accounts provide another effective way to grow your wealth.

Maximizing Tax-Advantaged Accounts

Tax-advantaged accounts are powerful tools for building wealth, especially when planning for future generations. They allow your investments to grow without being immediately taxed, and in some cases, they offer tax-free growth.

One popular option is 529 education savings plans, which are designed to help families prepare for education costs. Between December 2022 and December 2024, total assets in 529 plans grew from $388 billion to over $500 billion, with the average account balance reaching $30,295. These plans are particularly useful for covering hefty education expenses, such as the $56,390 annual average cost of a four-year private college.

In 2025, you can contribute up to $19,000 per 529 account (or $38,000 jointly) without triggering gift taxes. Alternatively, you can front-load contributions by making a lump sum of up to $95,000 (or $190,000 for married couples) without gift tax consequences. Jennifer Tierney, Executive Director at Morgan Stanley Wealth Management, emphasizes:

"Many of our clients are grandparents looking to put themselves in a position to help with their grandchildren's future education expenses. We encourage them to take a look at 529 Plans, which may not have been on their radar the last time they were looking at how to pay for college."

Strategic asset allocation across account types can also enhance after-tax returns. For example, place high-yield, income-generating assets like bonds or REITs in tax-deferred accounts (e.g., traditional IRAs or 401(k)s), while holding growth-focused investments like stocks in Roth accounts to take advantage of tax-free growth.

Another excellent option is a Health Savings Account (HSA). These accounts offer a triple tax advantage: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. By paying current medical costs out of pocket and letting your HSA funds grow, you can build a reserve for future healthcare needs.

The SECURE 2.0 Act has also introduced new flexibility, allowing unused 529 funds to be rolled into Roth IRAs under certain conditions, such as a $35,000 lifetime limit and a 15-year holding period.

Now, let’s look at how pooling resources with family can open up even greater opportunities.

Combining Family Resources for Bigger Investments

Pooling financial resources with family members can unlock larger investment opportunities that might be out of reach individually. Whether it’s buying property, investing in a business, or meeting the minimum requirements for exclusive opportunities, working together can amplify your financial potential.

Real estate is one area where pooling resources can make a big difference. For example, the Ahmed siblings combined their savings to purchase a rental property. Individually, they couldn’t afford it, but together, they shared the rental income and benefited from the property’s appreciation over time.

Investment circles are another way families can grow wealth collectively. By pooling funds and working together, families not only increase their financial power but also strengthen their bonds.

To make this approach work, it’s crucial to establish a clear legal structure, such as a partnership or LLC. This ensures everyone knows their roles and responsibilities, how much they’re contributing, and how decisions will be made. For example, written agreements should address:

• Contribution amounts
• Decision-making processes
• Roles and responsibilities
• Dispute resolution procedures

It’s a good idea to start small to test the waters. Begin with a modest investment to see how well your family collaborates. Once you’ve worked out any kinks, you can scale up to larger opportunities. Assign roles based on individual strengths - one person might handle finances while another focuses on research or due diligence.

Having a clear decision-making process is also critical. Whether you opt for majority voting, consensus, or appointing a lead decision-maker, everyone should understand how choices will be made. Regular family meetings can help maintain open communication and keep everyone aligned with your shared goals.

Modern tools like Maybe Finance can simplify managing shared investments. These platforms allow families to track multiple accounts and contributions in one place, making it easier to stay organized and on the same page.

Teaching Your Family About Money

Building multigenerational wealth isn’t just about growing your assets - it’s about ensuring every family member understands how to manage money wisely. Studies show that 90% of families lose their wealth by the third generation, often due to a lack of financial knowledge and communication.

Once you’ve built and protected your wealth, the next step is education. Teaching practical money skills, setting up clear financial structures, and having honest conversations about wealth transfer are essential. These steps create a strong foundation for sustaining financial success and ensuring a smooth transition of wealth.

Teaching Financial Skills to the Next Generation

Financial education is most effective when it starts early. Research reveals that money habits are largely formed between ages 6 and 12. While 35 states now require high school students to take a personal finance course by 2024, the lessons taught at home remain just as important.

Hands-on learning is a great way to teach kids about money. For example, using a clear jar for savings helps children see their money grow, and letting them use cash during shopping trips shows them the value of money and the cost of purchases. You can also teach opportunity cost by explaining trade-offs, like choosing one toy over another, to show that money is limited and requires careful decisions.

Instead of giving allowances, consider using commissions to reinforce that money is earned. Teenagers can learn more advanced skills like budgeting, saving for college, and understanding how credit cards work. For young adults, who face increasingly complex financial challenges, targeted education becomes even more critical.

Phillip Durbin, a Financial Planner at Generational Wealth Development, emphasizes starting early:

"Young people have perhaps the biggest advantage compared to other investors: time. The earlier you learn and apply key financial skills, the greater your rewards will be over the long term."

He also highlights budgeting as a cornerstone of financial success:

"The sooner you learn to budget for your life, the better off you'll be. Once you control where your money is going, you can start controlling how much you save."

Daniel Milks, Certified Financial Planner and Founder of the Fiduciary Organization, points out the benefits of early investment:

"Take advantage of compound interest by contributing to a 401(k) or Roth IRA as soon as possible. Even small contributions in your 20s can grow significantly over time."

Milks also stresses the importance of building strong credit by paying bills on time, keeping credit utilization low, and avoiding unnecessary debt.

For today’s tech-savvy generation, interactive budgeting apps and investment simulations can make learning about money more engaging by offering real-time feedback.

Here are a few resources that can help families with financial education:

Resource/Platform	Age Group Targeted	Type of Content Offered
FDIC Money Smart for Young Adults	16-24	Modules on budgeting, credit, savings
Khan Academy	All ages	Self-paced financial courses
CashCourse.org	College/Young Adults	Online money management courses
Practical Money Skills	All ages	Various financial topics

Setting Up Family Financial Rules and Structure

As your family grows and wealth increases, casual conversations about money might not be enough. Establishing a formal financial structure - like a family council - can help clarify roles and responsibilities. Think of this as your family’s version of a board of directors, guiding your financial future.

A family constitution or charter can outline shared values, principles, and decision-making processes. Regular family meetings, with pre-distributed agendas, help keep discussions productive. Assigning specific roles, such as managing investments or tracking expenses, ensures accountability and transparency.

Flexibility is also key, especially as individual financial situations change. Professional guidance from financial advisors, attorneys, or family counselors can provide valuable perspectives as you navigate complex decisions together. A well-organized governance structure not only simplifies decision-making but also sets the stage for open and effective wealth transfer discussions.

Talking Openly About Wealth Transfer

Preserving wealth across generations isn’t just about smart investments - it’s about clear communication. In fact, 60% of wealth transfer issues stem from a lack of open dialogue and trust, rather than external factors like market volatility. Despite this, more than half of Americans feel uncomfortable discussing money, even with close family. Only about 25% of those planning to leave an inheritance believe their heirs are well-informed about what they’ll receive.

Sarah Daya, Executive Director of Wealth Planning and Advice at J.P. Morgan, highlights the importance of communication:

"Communicating your estate plan and ensuring your family understands your long term wishes is important. Doing so may even increase the likelihood that your estate planning is executed according to your wishes."

Start these conversations early and tailor the details to match each family member’s age and understanding. Whether you’re educating your family about an estate plan, setting expectations for inheritances, or discussing the future of a family business, having clear objectives for each meeting is crucial. Rachel Feder, Founder of Rachel Feder Law, advises:

"It is good to have an agenda and issue it in advance of the meeting so all family members can come prepared."

Establishing rules for respectful and open communication helps create a safe environment for these discussions. While you don’t need to share every detail, ensuring that family members understand the general scope of inheritances - and any attached conditions - can prevent misunderstandings later. It’s also essential to address practical matters like long-term care planning, as 70% of people over age 65 will need some form of support.

Defining financial roles within the family promotes shared responsibility and accountability. Bringing in professional facilitators can also help ensure every voice is heard and the discussions remain productive.

Transferring Wealth and Creating Your Legacy

Planning for wealth transfer is a critical step in ensuring your legacy lives on. A well-thought-out approach can help reduce taxes, safeguard assets, and provide for future generations. Let’s dive into some essential tools and strategies for effective estate planning.

Estate Planning Basics

Estate planning is the backbone of any wealth transfer strategy. Yet, many Americans overlook it. According to a 2023 Caring.com survey, two-thirds of adults in the U.S. don’t have an estate plan. This lack of preparation can be costly, especially for high-net-worth families who could face estate taxes of up to 40% on amounts exceeding federal exemptions.

Currently, individuals can shield up to $13.99 million from estate taxes ($27.98 million for married couples). However, this exemption is set to drop to around $7 million per person in 2025, creating a limited window to take advantage of the current tax benefits.

Elliott Stapleton, Senior Vice President and Managing Director of Wealth Strategy at Ascent Private Capital Management of U.S. Bank, highlights the urgency of planning:

"Due to the high estate tax exemption levels, while most families have minimal taxable estates, high-net-worth families face significant risks. If these families don't create a comprehensive estate plan, they could be exposed to estate taxes of up to 40% on the value of the estate that's above the exemption."

One straightforward strategy is annual gifting. In 2025, the annual gift tax exclusion allows individuals to give up to $19,000 per recipient without filing a gift tax return. For a married couple, that’s $38,000 per recipient. Over 30 years, a couple could reduce their taxable estate by more than $1 million through consistent gifting.

Irrevocable trusts are another effective tool. Unlike revocable trusts, these require relinquishing control over the assets but offer stronger protection and potential estate tax benefits. For families aiming to lower estate taxes, this trade-off can be worthwhile.

A newer approach, known as "upstream" gifting, involves transferring assets to older family members - like grandparents - who can later pass them to younger generations. This method leverages the high lifetime gifting exemption.

Elliott Stapleton underscores the complexity of planning for high-net-worth families:

"It takes a multidisciplinary team to devise and execute a comprehensive estate plan for high net worth families."

Such a team typically includes estate planning attorneys, tax experts, financial advisors, and sometimes specialists in family business planning, ensuring every aspect of your strategy is covered.

Using Trusts and Family Foundations

Trusts and family foundations offer privacy, control, and tax benefits, making them powerful tools for managing wealth distribution. They allow you to decide how and when your wealth is used.

Charitable trusts, for example, can support causes you care about while providing tax advantages. Anna N'Jie-Konte, certified financial planner and founder of Poder Wealth Advisors, explains their flexibility:

"A charitable trust, depending on how that's set up, can be a certain dollar amount that is paid out to either the charity or to the grantor. There's so much flexibility there."

Two common types of charitable trusts include:

• Charitable Remainder Trusts (CRTs): Provide income for a set period, with the remaining assets going to charity.
• Charitable Lead Trusts (CLTs): Work in reverse, giving income to a charity first, with the remaining assets passing to heirs.

Family foundations offer a more permanent way to support philanthropic goals. Anna N'Jie-Konte notes their enduring nature:

"Family foundations are really set up as a way to get money out, and so they have certain minimum annual amounts or a percentage of their assets that they're going to have to give on an annual basis, which is 5%."

These foundations are gaining popularity, especially among families aiming to create a lasting legacy. Over half of families using foundations as their primary giving vehicle do so to establish a long-term impact. Additionally, the number of foundations with $10 million or more in assets has grown significantly, and more than 70% exceed the 5% minimum annual distribution requirement.

Beyond tax benefits, family foundations encourage collaboration, instill shared values, and provide younger generations with opportunities to engage in philanthropy. Foundations with a specific issue focus have risen from 54% in 2015 to 74% in 2025, reflecting a more strategic approach to giving.

Planning for Family Business Succession

If your wealth includes a family business, succession planning is just as important as personal estate planning. Unlike liquid assets, businesses require careful strategies to ensure continuity and long-term success.

Succession planning starts with identifying future leaders and preparing them for their roles. This might involve rotating potential successors through various departments to give them a well-rounded understanding of the business. Not every family member needs to work in the business, but those with interest and aptitude should receive proper training and mentorship.

Ownership transfer is another essential component. Gradual gifting strategies can help reduce the taxable value of your estate while allowing you to maintain control. Buy-sell agreements add clarity for situations like ownership changes or family members exiting the business. These agreements should outline valuation methods, funding mechanisms, and transfer restrictions to prevent disputes.

Regular business valuations are crucial for tax and succession planning. Knowing the current value of your business helps with fair compensation decisions and informs ownership transfer strategies.

As family involvement increases, clear governance structures become vital. A family council or board of directors - often including outside members - can provide oversight and separate personal relationships from business decisions.

The key to a smooth family business succession is starting early and keeping communication open. Regular family meetings to discuss business performance and succession plans can address potential issues and ensure everyone understands their role in the business's future.

Comprehensive financial tools can help track both personal and business assets during the transition, ensuring a coordinated approach to wealth transfer.

Building Your Financial Legacy

Creating a lasting financial legacy involves thoughtful planning, continuous education, and leveraging smart tools to help your family grow and sustain wealth across generations. The reality is stark: only 30% of wealth makes it to the second generation, and by the third, just 10% remains. But with a proactive approach, these odds can be turned around.

A strong financial legacy is built on proven strategies for wealth creation and protection, but it also hinges on prioritizing financial education. Teaching future generations how to manage and grow wealth is just as important as the wealth itself. Robert Ziegler, a financial advisor based in Delaware, puts it this way:

"Developing sound financial solutions is one part of the equation in guiding clients. Effectively teaching and communicating financial concepts to clients is, in many ways, just as important."

At the core of legacy planning is a comprehensive estate plan that safeguards your assets. Yet, only 33% of Americans have a living will or trust, leaving many families unprepared for the transfer of wealth. Phillip Furlong, Wealth Advisor with Regions Private Wealth Management, highlights the importance of adaptability:

"Family legacy planning is not a one-time event. It needs to be a living and breathing plan that changes as your family changes and as laws change. Surprises can happen that can cause a lot of distress if they're not adequately prepared for."

Open and ongoing conversations about finances are another key to successful legacy planning. Regular family meetings to discuss financial goals, values, and expectations can help prevent disputes and ensure smoother wealth transfers. These discussions should go beyond just assets, addressing financial literacy, spending habits, and the values you hope to pass down.

Modern financial tools can make legacy building more manageable. Platforms like Maybe Finance offer families a complete view of their financial landscape, tracking multiple accounts and currencies. With features like account aggregation across over 10,000 institutions and AI-powered insights, families can make informed decisions about investments, savings, and wealth transfers.

Teaching financial responsibility to the next generation is crucial for ensuring your legacy endures. While more than two-thirds of states now require personal finance courses for high school graduation - up significantly from less than half in 2022 - family-based financial education remains irreplaceable. Involve children in budgeting, show them how to distinguish between needs and wants, and model consistent saving and investing habits.

With an unprecedented transfer of wealth underway, proper planning has never been more critical. A skilled team of professionals can simplify your legacy planning by coordinating legal, tax, and financial strategies that adapt to evolving laws and family dynamics. When combined with ongoing education and proactive measures, these efforts lay a solid foundation for a durable financial legacy.

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