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Creating Intergenerational Wealth with Estate Planning

Posted by Aubrey Carew Sizer | Oct 17, 2022

The creation of intergenerational wealth with estate planning refers to a planned sequence of steps that are intended to preserve your family's wealth from one generation to the next (and beyond to multigenerational wealth if desired) – according to the wishes of those doing the estate planning. While your Virginia Last Will and Testament is foundational to your estate plan, there are a wide range of financial tools that can be used. If you are ready to address your estate plan in relation to creating intergenerational wealth, the experienced Virginia estate planning attorneys at The Law Office of Aubrey Carew Sizer PLLC have the legal insight and skill to help and can be reached at (571) 403-2619.

Estate Planning: Not Just for the Wealthy

When you consider estate planning, you very likely think of a wealthy estate owner, and hence, the name. Estate planning, however, is a tool that is available to everyone, including those in lower income brackets, and it is in the planning that wealth – regardless of how modest – can be protected, developed, and passed on to the next generation. In fact, this passing of wealth from one generation to the next is a building block of wealth building, which is an aspirational goal for those in every socioeconomic group.

The Board of Governors of the Federal Reserve System reports that inheritance, or the way that generations pass wealth to one another, is the most significant factor when it comes to the racial wealth gap. In other words, the matter of protecting intergenerational wealth with estate planning is just as relevant for those with fewer means as it is for those with considerable wealth.

What Is Intergenerational Wealth Planning?

In order to address the matter of intergenerational wealth planning, it is important to consider what generational wealth is. Generational wealth refers simply to the assets that a family passes down to the next generation (children) and potentially to the next generation (grandchildren), and the kind of assets involved can include any of the following:

  • Cash
  • Stocks and bonds, investment funds, and other financial tools
  • One's home or any other real estate
  • A business or interest in a business
  • Anything of value, including artworks, jewelry, watches, collections, vehicles, recreational vehicles, and family heirlooms

As such, intergenerational wealth planning refers to the plan that is implemented to guide this transfer of wealth, which typically involves families pooling their collective wealth to support one another throughout their lifetimes and extending the reach of this collective wealth to future generations. This generational wealth management involves bringing the generations together to seriously discuss the family's smooth flow of wealth – often according to the goals and plans discussed and agreed upon as a group.

Taking the Appropriate Steps

While your estate plan will be unique to you and your very personal wishes as they relate to distributing generational wealth when the time comes, there are several basic steps to address with your dedicated estate planning attorney to help ensure that your financial goals are well supported. At The Law Office of Aubrey Carew Sizer PLLC, we recognize how important your estate plans are to you, and we dedicate our impressive practice to helping clients like you cultivate intergenerational wealth with skilled estate planning. The primary steps involved in supporting intergenerational wealth with estate planning include all the following:

  • Assess your assets and liabilities
  • Determine your financial goals
  • Create a plan in support of your goals
  • Implement your plan and monitor its success
  • Implement a review process that helps to ensure your plan coincides with your family's evolving needs and life events

How Do You Pass Intergenerational Wealth?

Passing wealth from one generation to the next involves careful planning and financial consideration. While there is no one right way to address the matter of passing your intergenerational wealth, there are some basics that everyone interested in doing so should consider.

Financial Building Blocks

It is not enough to simply amass wealth in order to engage in intergenerational wealth with estate planning – you need the financial tools to build the infrastructure for generational wealth, which include financial education.

Investments

Once you have established the value of your net worth, you can move on to obtaining the financial knowledge you need to formulate an investment strategy. By investing, you protect your wealth from the negative effects of inflation and can begin the process of growing your wealth passively. While the stock market can be overwhelming, there are incremental steps you can take to help you develop a long-term plan that you are comfortable following. Even contributing to your 401(k) plan at work can amount to a considerable investment over time.

Real Estate

Another solid means of generating the intergenerational wealth that you intend to pass down is investing in real estate. Over time, the properties you own are almost certain to increase in value, and when you use your property or properties as rentals, they can also generate cash flow.

Savings

Having cash in savings helps to ensure that you have the financial security to cover whatever financial emergencies you happen to face and that you have the financial buffer necessary to take greater investment risks, which has the potential to pay off more generously over time.

Life Insurance

Having life insurance coverage protects your children and loved ones from any financial strain associated with your passing. The grief of losing a loved one is difficult enough to endure – without the added stress of a financial burden. If you have family members who rely upon you, having a life insurance policy is well advised.

Reach out to an Experienced Virginia Estate Planning Attorney Today

If you are ready to address the important matter of generating intergenerational wealth with estate planning, the trusted Virginia estate planning attorneys at The Law Office of Aubrey Carew Sizer PLLC have the experience and legal insight to provide you with the focused and informative legal guidance you are looking for. We are on your side and well prepared to help, so please do not wait to contact or call us at (571) 403-2619 for more information today.

About the Author

Aubrey Carew Sizer

Aubrey Carew Sizer is the Principal Attorney of The Law Office of Aubrey Carew Sizer PLLC, a Northern Virginia law firm providing representation for Wills, Trusts, and Estate Planning, Long-Term Care Planning, Guardianship and Conservatorship, Special Needs Planning for the Disabled, and Probate, Estate and Trust Administration.

Services

The Law Office of Aubrey Carew Sizer PLLC provides customized and affordable estate planning (including wills, living trusts, powers of attorney, and advance medical directives); elder law services (including long-term care planning, special needs planning for the disabled, and guardianships and conservatorships); probate, estate and trust administration (including advising executors and administrators of estates about post-mortem planning and the local probate process in Virginia), as well as general aging and disability advice in Northern Virginia, including but not limited to Arlington, Alexandria, Ashburn, Bristow, Burke, Centreville, Chantilly, Gainesville, Fairfax, Falls Church, Haymarket, Herndon, Leesburg, Manassas, Manassas Park, Reston, Springfield, Sterling, and throughout Loudoun, Prince William, and Fairfax counties.

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