Building a Legacy: How to Ensure Your Wealth Lasts for Future Generations 

Australia is on the brink of an extraordinary financial shift, with an estimated $3.5 trillion set to be passed down as baby boomers transfer their wealth to younger generations over the coming decades. Yet, while this wealth transfer can potentially leave a lasting legacy, the reality can be quite different.

Studies have shown that around 70% of a family’s wealth is lost by the second generation, and a staggering 90% has disappeared by the third generation. This statistic, from a 25-year study by US wealth consultancy The Williams Group, highlights the challenge families face in preserving wealth for the long term.

While this data is drawn from US families, the trend is just as relevant for Australian families. The same risks apply, whether due to insufficient estate planning, lack of financial literacy, or family disputes. Proactive and comprehensive planning is essential if your goal is to ensure that your wealth endures for more than three generations.

Our Morrows advisors have prepared the following article to help you build a legacy that not only stands the test of time but continues to prosper for future generations

1. Legacy Planning: Developing a Comprehensive Plan

Legacy planning is more than drafting a will—it’s about creating a roadmap that manages, distributes, and preserves your assets over time. Here are key aspects to consider: 

• Estate Planning: Ensure your will, power of attorney, and health directives are up to date. Having a clear succession plan helps prevent conflicts and keeps your family aligned with your wishes. 

• Philanthropy: Whether you’re passionate about supporting your community or global causes, charitable trusts or foundations can help you create a lasting impact that reflects your values. 

• Tax Efficiency: Tax planning is crucial to ensuring that more of your wealth goes to your heirs, rather than to the taxman. Working with tax advisors can help you minimise the burden on your estate. 

A comprehensive legacy plan will give your family clarity and direction, ensuring your wishes are honoured and your wealth preserved. 

2. Family Involvement: Engaging Family Members Early

Bringing your family into the legacy planning process early can make all the difference in preserving wealth across generations. By actively involving your loved ones in wealth management, you’re not only imparting valuable financial lessons but also fostering a shared sense of responsibility. 

• Family Meetings: Introducing your family to trusted advisors early and holding regular family meetings can help everyone understand the family’s financial goals and how to preserve them. 

• Early Education: Start teaching younger generations about investing, saving, and responsible spending from an early age. This education will equip them with the skills needed to manage and grow the family’s wealth. 

• Inclusion in Decision-Making: When you involve family members in investment and estate planning decisions, they’re more likely to respect and uphold the values and goals set by previous generations. 

Families that engage early and often in the planning process are better equipped to carry forward the legacy and values that built the wealth. 

3. Trust Structures: Protecting and Managing Family Wealth

Trusts are powerful tools for protecting and managing your family’s wealth. They can provide several advantages: 

• Asset Protection: Trusts help safeguard your assets from creditors and legal disputes, ensuring they remain intact for future generations. 

• Control Over Distribution: Trusts allow you to specify how and when your wealth is distributed, ensuring responsible management by your beneficiaries. 

• Tax Benefits: Properly structured trusts can offer tax benefits, reducing the tax burden on your estate. 

Whether you’re considering a family trust, discretionary trust, or charitable trust, it’s important to work with your trusted advisors to choose the right structure for your needs. 

4. Professional Partnerships: The Importance of Ongoing Support

Building a legacy requires more than a well-laid plan—it requires ongoing support from professionals who understand the complexities of wealth preservation. The financial landscape is always evolving, and your legacy plan should evolve with it. Regular communication with your team of accountants, financial advisors, and legal professionals is essential to keeping your plan aligned with your goals. 

• Regular Reviews: Schedule annual reviews of your legacy plan to adapt to changes in tax laws, market conditions, and family dynamics. 

• Specialised Advice: Working with specialists in tax, law, and investments will ensure each aspect of your legacy plan is optimised for success. 

• Continuous Education: Staying informed about new developments in estate planning and wealth management helps secure your strategy and keep it up to date. 

At Morrows, we offer regular reviews and ongoing education to ensure that your legacy plan evolves with your family’s needs and the changes in tax law and compliance requirements.  

How Morrows Can Help 

Building a lasting legacy involves more than careful planning—it requires the ongoing support of trusted professionals who understand the intricacies of your family and wealth preservation. We’re here to support you on this journey, helping ensure that your family’s wealth is protected and continues to grow for future generations. 

Whether you’re just starting your legacy planning or refining an existing strategy, we’re here to help you and your family every step of the way. Contact your Morrows advisor today to start building a legacy that lasts. 

Sources: 

https://www.pc.gov.au/research/completed/wealth-transfers/wealth-transfers.pdf 

Our Story | Williams Group | Estate Planning Advisors (thewilliamsgroup.org)