Financial Poise
The hands of multiple generations hold a piggy bank, speaking to the importance of family legacy preservation.

6 Ways to Make Your Family Legacy (and Wealth) Bulletproof

Successful families work hard to build and manage family wealth. They don’t do so for the sake of achieving some number on a balance sheet, but because they want the wealth to support their family life and legacy. Whether you use a family office to manage your wealth or do it yourself, wealth serves as a fuel for legacy creation – not a legacy in and of itself.

As a family’s wealth grows, it is easy to get consumed by the numbers. From taxes to balance sheets and beyond, there’s a lot to consider. There comes a point when it may be a good time to take a step back and reflect on the why of it all — your family purpose. Those answers will get you results with meaning beyond dollar signs.

What is Your Family Legacy?

We can’t define family legacy for you and yours. Instead, the challenge becomes asking yourselves questions about who you are and how you want to be perceived. Those answers help you get a better sense of what you’re trying to accomplish.

Those answers will also aid you in building a framework to help guide family decisions. This framework can be understood as a Family Purpose. You will want to define:

  • Family Mission: Who we are and what we are about
  • Family Vision: Where we want to go and how we will get there
  • Family Values: The values that have guided us in the past and that will shape our future

Outlining of these leaves less room for inefficient debates about direction. At the end of the day, each choice must answer the question, “Does this align with Family Purpose?” If the answer is not a resounding yes, then you have your answer. 

Why Deliberately Pursue a Family Legacy?

Developing your family legacy is a process that requires time, reflection, dialogue between family members, the sharing of family stories, and a willingness to listen. But developing your family purpose to support the development and strengthening of your family legacy can pay dividends. 

Because defining a family purpose is necessarily collaborative, the process can strengthen relationships and foster a sense of unity. The pride of looking back mixes with the excitement of looking forward to yield better alignment across the family and a strong commitment to your shared goals. 

Developing a family purpose together now may also keep the peace more effectively later on. Money can turn into a contentious topic among family members no matter how much you have. But when family wealth rises to the point that collaboration on its management and use, emotions can run even hotter. While having a defined family purpose offers no guarantee such cases won’t arise between you and yours down the road, it does offer a stable means of navigating them.

But agreeing upon a family purpose today is also about protecting the long-term legacy of the family. If you can find that understanding, you empower individual family members to succeed independently and set the stage for future generations to do the same.

6 Ways to Cultivate Family Purpose and Protect Your Legacy

You might be rolling your eyes right about now. Of course, the idea of developing a family purpose in pursuit of building a legacy sounds nice. But family can be a tricky thing to navigate under the best of circumstances. How on earth do you get from here to an agreement?

It’s important to remember that your family’s purpose is not set in stone. It probably won’t get hashed out in one afternoon of conversation and it will likely shift over time. Fortunately, there are steps you can embrace today to keep everyone moving in the right direction.

1. Spend Quality Time with Your Family

Use your wealth to spend more quality time with family. This may mean transitioning a business earlier than absolutely necessary to make that possible. It could look like simply being more intentional about prioritizing family gatherings, vacations, or retreats.

As sociologist Dr. Dennis Jaffe told the New York Times, it is relationships – not money – that define successful attempts at building a family legacy. In talking about the true titans, he stated: 

They made the choice to invest in the family. They’ve seen that the quality of the people in the family and who they are is going to determine if the family succeeds in the future. The business decisions are important, but they’re really derived from the quality of the family.

2. Pass on the Family Folklore to Future Generations

Successful families typically accumulate and manage family wealth through hard work, risk-taking, and discipline. But the challenge that many families face is that, as the generations continue, the values and character that gave rise to the wealth become a distant memory. 

Become intentional in passing on the family legacy through telling stories and sharing memories, specifically ones that highlight your values. Give them reasons to feel pride in where they come from and where they are today. Make them feel like the family legacy is something they should want to contribute to, and it’s more likely to persist when you’re gone.

It’s also important to have frank discussions about your estate plan, especially if there are multiple heirs, in order to avoid or soften conflicts between members of future generations. A family legacy may be destroyed if the conversation is avoided.

3. Make an Impact Now

Families are often very generous and want to give back. But no two families do this the same way. Many families choose to give back — to make an impact on their world — based on their values and experiences. How families choose to give back and impact the world is typically tied back to the family mission.

But enduring legacies require family leaders to show what the agreed-upon family purpose looks like in consistent practice. If philanthropic giving or impact investing plays a central role in your family purpose, demonstrating that today and having discussions about the efforts will make those elements more easily replicable. 

4. Prioritize Health and Wellness

All the money in the world can’t buy health and longevity. Families should prioritize health and wellness to lead longer, more active, and fulfilled lives. Ultimately, your family’s well-being is your greatest asset no matter who you are!

But when it comes to building and growing a legacy, wellness holds an even more critical role. Younger generations benefit from having more time with their older, more experienced counterparts. The more focus you put on wellness, the more time you will have to teach, and the more likely your lessons will carry the family through for decades to come. Bonus? Just being healthier can add to your wealth in the long run. 

5. Give the Next Generation the Opportunity to Take Risks

Many families who have accumulated wealth did so by taking risks and being disciplined. As time goes on, they may become tempted to focus on wealth preservation instead, taking on a more conservative approach to where and how they deploy their resources.

But that does not set the stage for a lasting family legacy. This is why some families have made it a priority to support future generations in ventures that were not possible for them on their own. 

For some young people, this might mean joining or even starting a venture capital firm. In other cases, this might mean launching a tech startup. But supporting these kinds of endeavors hearkens back to a spirit of entrepreneurship and risk-taking that gave rise to their wealth in the first place.

This doesn’t mean families should bet on every pitch that gets thrown on the table. There is a difference between throwing money at a relative with a weird idea and empowering them to succeed in a thoughtful, deliberate fashion. Which brings us to…

6. Educate Your Family Financially

You understand the numbers in all this, right? Can you say the same about the rest of your family? How can you expect them to make the kinds of choices that got the family into a position of wealth if they don’t understand how they work?

Investing in your family’s financial literacy is one of the most important things you can do to preserve your family legacy. As Lloyd Kurtz, head of Social Impact Investing at Wells Fargo, states:

One of the challenges we run into is the difference in financial knowledge across family members. Sometimes you’re in a room with one who wants to know the Sharpe ratio of the portfolio, and right next to them sits someone who has no idea what that means. Our goal becomes meeting both of them where they are so everyone can get something of value out of the discussion.

Building financial literacy across your family can be a multi-layered endeavor. Maybe it means they expect all family members to take an AP-level business class in high school. Perhaps it means giving new additions to the family a crash course on some of the basics. In other cases, building financial literacy could be baked into your succession planning. 

Find Purpose Today to Protect Tomorrow

I encourage you to look beyond the numbers to help you define your family purpose and develop your family legacy. What are the things most important to you and your family? How can you manage family wealth to provide the flexibility to pursue these passions?

The conversations involved in defining your family purpose might not feel comfortable or easy. But given the benefits that come from its clarity, the time to start talking is now.

Want to improve your financial literacy beyond these money basics lessons? Make sure you check out the Financial Poise On-Demand Webinar Series. From how to invest to how to build a business, the topics covered are all but endless! Click here to learn more about our offerings.

This is an updated version of an article from 2020. © 2023. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.

Share this article:

About Robert Legan

Robert Legan leads Whitnell’s Family Office Services practice, serving as a strategic advisor for families to help preserve, grow, and transfer family wealth. Robert is passionate about helping families navigate the complexities that come with wealth and collaborating with family members and advisors to implement integrated solutions. Share this article:

Read Full Bio »   •   View all articles by Robert Legan »

Article Comments

  • My Wealth Locker says:

    Hey Robert, Thank you for sharing this great information.

  • >