By Jessica Kmetty
My first grandbaby arrived this year. To say I’m excited is an understatement. Aside from the fresh newborn smell and cuddles and coos, I look at this baby and see a whole world of potential and a future of possibility. And because I lead a financial planning firm where our goal is to help people reach financial freedom and navigate multigenerational financial planning, I see how the pieces of each generation of our family work together.
Multigenerational financial planning is a long-term strategy that focuses on managing and transferring wealth across multiple generations of a family. It goes beyond just retirement or estate planning and takes into account the financial needs, goals, and values of children, parents, and grandparents (maybe even great grandchildren).
My family currently spans FOUR generations. We are a mix of geographic locations, blended and traditional family units, shared and independent values and philosophies, experiences, expectations and so much more. These differences mean that a “one-size-fits-all” approach to financial planning doesn’t work, not for my family or your family. Effective multigenerational planning must be tailored to the specific people, values, and dynamics of the family it serves.
Some Key Components of Multigenerational Financial Planning:
Estate Planning
- Wills, trusts, and powers of attorney
- Plans for wealth transfer with minimal tax impact
- Avoiding probate and legal complications
Tax Planning
- Strategies to minimize estate, gift, and inheritance taxes
- Using tools like family limited partnerships or generation-skipping trusts
Education Funding
- College savings plans (e.g., 529 plans) for children or grandchildren
Insurance Planning
- Life insurance to protect family income and support legacy goals
- Long-term care insurance for aging family members
Investment Strategy
- Building a portfolio that supports short-term needs and long-term legacy goals
- Aligning investments with family values
Succession Planning
- Especially for family businesses
- Prepares heirs to manage or inherit the business or other assets
Family Governance and Communication
- Family meetings to discuss financial values and legacy goals
- Educating younger generations about financial literacy and responsibility
That’s a lot!
But what you’ve created over generations isn’t quickly organized. Family dynamics, priorities, responsibilities, relationships and more can impact your planning, so take your time and consider help. Multigenerational financial planning involves laying a solid foundation that combines communication, clarity, and professional guidance.
Where should I start?
- Start with Open Communication
Bring key family members together to discuss shared values, financial goals, and concerns. This includes talking about topics like education funding, retirement, inheritance, charitable giving, and the future of any family-owned businesses. These conversations help build trust and transparency while aligning everyone’s expectations.
- Define a Family Vision and Mission
Create a family mission statement that reflects your values and long-term vision. This serves as a framework for financial decisions and legacy planning. Especially in the context of multigenerational financial planning, it ensures that wealth, responsibilities, and opportunities are managed in ways that honor shared values and long-term goals. By defining what truly matters to the family, a mission statement supports more intentional living and can strengthen family bonds over time.
- Take Inventory of Assets and Liabilities
Gather a comprehensive overview of all family assets including property, investments, businesses, insurance policies, and debts. Understanding your financial position is essential for creating effective strategies.
- Establish or Update Legal Documents
Make sure wills, trusts, powers of attorney, healthcare directives, and beneficiary designations are in place and reflect your current goals. Consider setting up trusts or other vehicles to efficiently transfer wealth and protect assets.
- Work with Qualified Professionals
Partner with financial advisors, estate planners, and tax professionals who specialize in multigenerational planning. They can help you navigate complex legal, tax, and investment strategies tailored to your family’s needs.
How do I help the future generations be good stewards?
Helping future generations become good stewards of family wealth requires more than simply transferring money. It involves passing on the knowledge, values, and sense of responsibility that make wealth a positive force in their lives and in the world. Financial education is the foundation.
Teaching young family members how to budget, save, invest, and give not only builds their confidence but also helps them make informed decisions. These lessons can start early and evolve over time, with age-appropriate guidance, real-life experience, and support from financial advisors or structured learning programs.
You also want them to understand the core values and purpose behind your family wealth, which could involve sharing stories of how wealth was created and the risks, sacrifices and values that guided those efforts. Getting the younger generations involved in family decisions gives them responsibility, confidence and hands-on education.
You may also choose or have a need for guidelines surrounding inherited wealth. Developing governance for inherited wealth involves creating a clear structure, set of rules, and decision-making processes that help a family manage and sustain its wealth across generations. Without proper governance, even large fortunes can be mismanaged or cause conflict among heirs. Strong governance builds accountability, preserves family values, and ensures long-term financial stewardship.
Being a good steward is both knowing how to manage money and having the character, competence, and commitment to use wealth wisely. By building financial literacy, modeling values, and fostering meaningful engagement, you empower the next generation to lead with purpose and maintain alignment with the family’s long-term vision.