Creating Generational Wealth with Trusts: How to get started

Building generational wealth not only protects your legacy, it also gives your family more freedom and security in life. If you want to protect your family from financial burden, or simply want to give them the option to pursue a more fulfilling life, consider building generational wealth with trusts. To maximise the benefits of a trust, take advantage of the full-suite of estate planning, from leaving a Will to setting up different types of trusts. To learn more about how you can preserve generational wealth, please contact Hello Estate Planning today.  We’ll work with you to protect your assets and minimise taxes for generations.

What is generational wealth?

Generational wealth includes financial assets such as property, investments, or any other assets that can be passed down from one generation to the next. It’s important to note that intangible assets like financial planning education, values and saving habits are also important in building and preserving generational wealth.

How can you build generational wealth?

Not only is it challenging to build generational wealth, but it’s also more difficult to preserve it from one generation to another. This can be alleviated by investing in your child’s education and openly discussing financial planning concepts.

Develop a long-term mindset

It starts with developing a long-term, growth mindset. Creating generational wealth can take a long time and it’s not easy to achieve. We recommend working with an estate planner to discuss your wealth goals and plans.

Start investing

TAs mentioned earlier, to accelerate the wealth-building process, it’s important to start early by investing. With rising interest rates and inflationary pressures, saving and investing in the current environment can be trickier than usual. But this is no reason to put off building generational wealth for your family’s future. Investing in shares, real estate or your child’s education are all excellent ways to start building wealth. Creating a business to pass down to the next generation is also an additional way to build generational wealth.

Create a trust to protect your assets and protect generational wealth

Once you’ve done the hard work of saving up and investing, talk to your estate planner about protecting your assets by creating a trust. A trust is a fiduciary agreement that holds assets for one or more beneficiaries.

Trusts: Which one is right for you?

Given that there are several different types of trusts, which can be created for a variety of reasons, we recommend scheduling a discussion with one of our estate planners to discuss the best option for you. Briefly, some of the more common types of trusts include fixed trusts, which are set up with identifiable beneficiaries during the settlor’s lifetime (the person setting up the trust).

Additionally, discretionary trusts are similar to fixed trusts–however, the settlor is one step short of assigning a fixed beneficiary, providing trustees with discretion to choose how to distribute trust assets. Charitable trusts are yet another type of trust that enable settlors to leave certain assets for public and charitable purposes. We strongly recommend contacting us for a full and comprehensive discussion of which trust is right for you.

Make a plan to fully protect your money

Trusts are only one element of estate planning. You can also rely on a Will, Power of Attorney, and different types of trusts to protect your assets, minimise taxes at the time of transfer and plan for your family’s future wealth and success. With smart planning, your family can continue to benefit from your legacy for generations to come. To discuss the various types of trusts and how you can protect your assets, please contact Hello Estate Planning for more information.