How to Build Generational Wealth That Lasts for Decades
by Gabriel Lewit
When people think about “generational wealth,” they often picture massive estates, trust funds, or highly successful family businesses. However, the truth is far more straightforward: the wealthy continue to accumulate wealth across generations because they treat money as something that must be managed thoughtfully, not just for their own lifetime, but for several future generations as well.
Generational wealth isn’t only about having a big balance in your bank accounts or a substantial investment portfolio. It’s about having structure, effective communication, clear intention, and ongoing education of future generations. And while high-net-worth families tend to formalize these practices, anyone, at almost any financial level, can begin building a legacy that spans multiple generations.
This article examines the key steps wealthy families take to pass on their wealth more effectively, offering practical insights for you and your family members as you begin developing your own long-term financial plans.
Read our latest quick guide: What the Wealthy Know About Building Wealth
What is generational wealth, and why do wealthy families build it intentionally?
As the name implies, generational wealth refers to assets or financial resources passed from one generation to the next. These resources can include investment accounts, real estate, family businesses, insurance proceeds, or even financial knowledge and charitable habits.
High-net-worth families rarely treat wealth as a short-term accomplishment that ends with the life of the surviving spouse. Instead, they look decades ahead at ways their wealth can benefit their families and communities. They prioritize a family structure because they want their assets to help their children, grandchildren, and sometimes the charitable causes that matter most to them (church, hospital, university, medical research).
This multi-generational mindset is one of the most significant differences between families that build and maintain sustainable wealth and those that spend it within one or two generations.
Why is estate planning so important for passing down wealth?
Estate planning provides a framework for transferring wealth. However, families who take generational wealth planning seriously want a clear and organized strategy for transferring assets to the next and future generations, especially when multiple beneficiaries or complex types of assets are involved.
A well-built estate plan may include:
- A current will
- Powers of attorney
- Health directives
- Updated asset titles and beneficiaries
- Trusts for specific goals
- A plan for taxes and liquidity
Without an estate plan and the proper documents, state laws may determine how assets are distributed, which often creates major conflicts. For families with higher levels of wealth, a lack of planning can also lead to unnecessary taxes or other complications that diminish the estate’s future value.
Individuals working with a financial planner in Buffalo Grove typically have meetings to regularly review their estate documents to ensure they remain aligned with life changes, tax updates, and evolving family dynamics.
Watch our co-founder, Steve Lewit, on WGN 9 News, discuss strategies for saving for college and retirement.
How do trusts help families promote the efficient transfer of assets?
Trusts are a common feature of multigenerational wealth planning because they offer control, clarity, and customization.
Trusts can help your family:
- Pass assets according to specific timelines
- Support young beneficiaries gradually
- Separate inheritance from potential outside risks
- Fund education or healthcare
- Continue charitable goals
- Protect family-owned assets such as real estate or businesses
Rather than leaving a large lump sum to children, trusts enable parents to design a thoughtful structure that guides how their wealth is managed and used after they’re both gone. This reduces the likelihood of mismanagement and supports smoother transitions.
It’s one reason many high-income families work with a Buffalo Grove financial advisor and an estate attorney to align trusts with their long-term financial plans for retirement and the transfer of assets.
Why do wealthy families prioritize educating heirs?
One of the most overlooked aspects of generational wealth is the provision of financial education to subsequent generations. Families who sustain wealth often teach their children early in life about:
- Saving vs. spending
- Investing fundamentals
- Taxes and financial obligations
- How to read and interpret financial statements
- The value and impact of charitable giving
- Responsibilities associated with inherited wealth
- Philanthropy and community engagement
These families also hold structured conversations, and sometimes semi-annual “family meetings”, to discuss roles, responsibilities, goals, and expectations.
The reasoning is simple: wealth transferred without guidance is often short-lived. Wealth transferred with clarity and education has a much greater chance of lasting for multiple lifetimes.
Read our Quick Guide: “Smart Financial Planning for Buffalo Grove Business Owners.”
What role do family businesses play in generational wealth?
Many wealthy families build and pass down businesses that create long-term stability and opportunity for future generations. A family business can also provide:
- Funding education for multiple family members
- Jobs for multiple generations
- Income streams that support retirement planning
- Equity that grows over time
- A sense of shared purpose
However, family businesses don’t operate in a vacuum. They rely on succession planning, documented processes, leadership development, and clear communication between family members. Parents who want their businesses to last beyond their generation often ask questions like:
- Who will take over the business?
- Should we divide ownership equally?
- What happens if one child wants to work in the business and another doesn’t?
Working with a financial advisor can help families structure business transitions in ways that support both their financial goals and family dynamics.
What actionable steps can my family take today to start building generational wealth?
Here are seven steps for anyone who wants to create a lasting impact in the future. These steps apply whether you’re already financially independent or just beginning to build that level of wealth:
- Start investing early: Even small contributions to retirement accounts, brokerage accounts, or 529 plans can grow meaningfully over time. The earlier you begin, the more time you give your assets to compound and create value for future generations.
- Build a clear estate plan: A simple will, trusts where appropriate, beneficiary designations, and powers of attorney go a long way. You don’t need millions to create clarity and security for your family
- Use life insurance strategically: Life insurance can leave a meaningful legacy or provide for the primary financial needs of current heirs
- Prioritize debt management: Eliminating high-interest debt strengthens the financial foundation that you pass on to the next generation.
- Document everything: Write down wishes, instructions, contact information for financial professionals, passwords, and locations of important documents.
- Open conversations early: Talk to children or heirs about finances in age-appropriate ways. Even brief conversations can make a big difference
- Establish family values: Define what your family’s wealth is for: education, philanthropy, entrepreneurship, security, or promoting the longevity of a business. A clear sense of purpose helps guide financial decision-making.
Listen to our podcast episode, “Financial Thankfulness.”
How can my family maintain its affluence across multiple generations?
Staying affluent requires planning, effective communication, and regular reviews. At SGL Financial, we recommend checking in on your plan around twice per year, depending on your unique circumstances and especially after significant life changes such as retirement, marriage, the sale of a business, or the birth of a grandchild.
Coordinating investments, taxes, insurance, and estate planning under one unified strategy helps prevent gaps and avoid confusion for heirs.
Passing Wealth Forward with Intention
Generational wealth isn’t only measured in dollars. It’s reflected in the habits, values, and clarity you pass down. Wealthy families maintain their discipline because they view planning as a continuous process, one that seamlessly integrates financial structure with family values.
Whether you’re preparing for retirement, organizing your estate, or starting to think about what you hope to leave behind, SGL Financial helps families throughout Buffalo Grove take the next step with thoughtful, coordinated financial strategies.
Let’s schedule an introductory call.
