Intergenerational wealth is not only about passing on financial assets, but also about instilling values and principles that can guide the next generation, Chris Wilson says. Photo / 123rf
By Chris Wilson, CEO of Jarden Wealth.
OPINION
If you have some money to spare, you might want to leave something behind for your children. But how do you ensure it ends up in their hands safely?
This is where the practice of intergenerational wealth planning is invaluable.
It allows you to strategise how your assets get passed on to your children and empowers them through teaching values, knowledge and financial skills to use their inheritance wisely.
If you think intergenerational wealth planning is not for you, think again. Even a modest amount of savings can make a difference if you invest it wisely.
You can also use your wealth to support causes that matter to you and your family and create a positive impact on the world.
So how can you effectively achieve this?
Preparing the next generation for wealth management
One of the best ways to ensure your kids are prepared to handle their inheritance is to educate them about money from an early age.
Teach them the basics of budgeting, saving, investing, and giving. Involve them in your own financial decisions so they learn first-hand how to manage money practically.
As your kids grow older, you can start to introduce them to more complex topics. The more they know, the more confident and capable they will be to manage their inheritance.
Understanding and adjusting investment strategies to remain aligned with the family’s progressing needs is a fundamental role a wealth adviser can play in assisting your family over time.
They can be an external party that helps to safeguard the future of your financial legacy, as your children may have different investment goals and risk appetites.
Their involvement will mean developing innovative strategies that align with what sparks your children’s interest the most, for example.
For-purpose giving and its impact on society
Intergenerational wealth is not only about passing on financial assets, but also about instilling values and principles that can guide the next generation.
By engaging in responsible investment and philanthropy, families can teach their children about social responsibility and empathy, as well as create a lasting impact on the communities they care about.
In preparing your children to manage wealth, some wealth advisers can teach them the concept of ‘for- purpose giving’, where giving is driven by a clear purpose and a measurable impact.
It is not just about charity, but about creating a positive change in the world.
For-purpose giving can help the next generation develop a sense of drive, gratitude, and compassion.
It can also help them align their wealth with their values and passions, all while successfully continuing your legacy.
You can help them find a cause they are passionate about and support them with their donations and volunteering, teaching them how to evaluate the effectiveness and sustainability of their giving.
Whether you have a lot or a little to pass on, thoughtful planning ensures your wealth supports your family’s values and goals and leaving a lasting legacy that goes beyond money.
DISCLAIMER: This research has been prepared by Jarden Wealth Limited (Jarden) which holds a licence issued by the Financial Markets Authority to provide a financial advice service. The information in this research solely relates to the companies and investment opportunities specified within. For a full publicly available disclosure statement, see https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/.
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