Your Guide to Generational Wealth | How to protect and pass down wealth 💰

I once heard about a man who had $80 million and recently passed away, and his kids will not get any of it. That story is why I made a video about generational wealth, even though it is a little different from my usual housing update.

Generational wealth is money that will last beyond you and go to your kids, and if you are lucky, to your kids' kids. I see it showing up in three groups. The first is the middle class family, who invest over about 30 years in a 401k, maybe a pension, maybe the S&P 500, and own a home and a couple of rentals. By 65 they may have between $1 million and $3 million in net worth, counting paid-off real estate. The second group is business owners, who take more risk and may sell a company for 10, 20, 50 million or more and have a larger estate to manage. The third is investors. I know one guy who built a $10 million portfolio in seven years by taking advantage of a few trends. All three groups need a plan so their assets outlive them and the family stays close, because if there is one thing that can mess up a family, it is money.

The biggest mistake I have seen families make is not planning ahead. I have watched families fight over who gets what when Mom or Dad passes away, and I cannot count them all. The worst part is seeing a family come unglued.

Here are some simple steps I shared. First, think about how to avoid probate. In very simple terms, probate is when the local courts step in and decide who gets what, and it can be costly. A trust is the simplest way many people avoid it, and it lets you specify who in the family gets what and when. I am not an attorney, so work with a good one. I will tell you as a cancer survivor that you cannot think about these things early enough. If you buy a primary residence and have $100,000 in equity, you should start learning. And keep your attorney updated whenever you add a property so nothing falls between the cracks.

Second, think about taxes. Very large estates can face federal estate tax, although the exemption starting in 2026 is $15 million per person, so most families will not owe it. For estates that do, there is no way to avoid taxes completely, but there are ways to offset it. In my circle, one way is life insurance. My belief is that life insurance should be two to three times your annual income, and the people I run with prefer term coverage for about 20 years, updated about every 5 years. If you are the primary breadwinner like I am, it gives your spouse a simple way to pay off the mortgage and some breathing room.

Third, talk to your family. I have three kids, and one asked me once, Dad, aren't we rich? I told him no, I'm rich, your future is yet to be determined. I have never told my kids what they will get. I once worked with an 18 year old client with a great job, no debt, great credit and $25,000 saved. Her parents had told her since she was little that she was getting nothing, and I thought that was one of the greatest gifts they could give her. The greatest thing our kids will inherit is the education they get along the way.

If you are buying a home and want to start your own plan on the right foot, you can get your rate or ask us about your options.