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Building Intergenerational Wealth: A New Middle-Class Obsession

Family money was always the preserve of the rich. Wealthy business tycoons and aristocrats would put their funds into trust and distribute them to their heirs once they were gone.

Author:Dexter Cooke
Reviewer:Darren Mcpherson
Nov 22, 2023
11.8K Shares
274.9K Views
Family money was always the preserve of the rich. Wealthy business tycoons and aristocrats would put their funds into trust and distribute them to their heirs once they were gone.
However, the middle class is now becoming so wealthy that something similar is becoming possible for ordinary people. Something like half of all Americans now own estates worth more than $1 million, which means that intergenerational wealth discussions are exploding.
Lancier Legal PLC is an estate planning attorneythat’s right at the forefront of these developments. It’s seeing an influx of clients looking for help with what to do with their assets.
“It used to be the case that estates were simple,” the company explains. “Most people had a family home and perhaps some cash in the bank to disperse upon the death of the estate holder. Surprisingly, that’s no longer the case. The U.S. economy is generating so much wealth that millions of regular people are now finding themselves in the position of owning vast wealth towards the end of their lives. People hold yachts, second homes, multiple bonds, and stock portfolios, private equity in businesses, and valuable art. Crypto is also adding complexity.”
These changes mean that building intergenerational wealth is something that a majority of people can now do. Parents can provide their children and grandchildren with financial cushionsthat were never possible in the past. There simply weren’t enough wealthy people.
What’s interesting is that building intergenerational wealth no longer requires spectacular connections or heroic efforts in the workplace. More so than ever, it is just a matter of time and proper planning.
“We strongly believe that people who plan their estates properly will be able to maintain intergenerational wealth,” Lancier Legal PLC says. “While these methods won’t produce spectacular wealth, they will help to keep money in the family for longer.”
There are numerous reasons why middle-class families are looking to build intergenerational wealth.

Financial Security

The main driver is financial security. People want to build wealth for their families into the future and create a culture of investment and savings that transmits down the generations.
“Estate planning is essential for things like education, healthcare, and other resources. People don’t want to rely on external sources of income and wealth that might not be available in the future,” Lancier Legal says.
The risks are, of course, real. Unfunded government debtmeans that many people might not receive the benefits they’ve paid for all their lives. In the future, private money may have to make up the difference for a dwindling state welfare scheme.
The economy might also suffer in the future if debt continues to be a problem. Productivity might not rise fast enough to justify high transfer payments in the future.
“Our clients want to know their money is going to go to a good place once they are gone,” says Lancier Legal. “That’s fundamentally what estate planning is all about. The economy is unknown, but private wealth tends to have more sticking power.”

Legacy And Family Values

The middle class is also using intergenerational wealth as a legacy and to promote family values. Instead of allowing state laws to divide assets, owners of large estates are using formulas designed to enable money to last for longer and to go to good causes.
“The rise in the number of families putting their assets in trusts has been quite significant,” Lancier Legal says. “We’re seeing people looking for ways to ensure their money is put to good use after they are gone so that they can protect their legacy and establish the reputation of their family for the future.”
Some families, of course, put their money into trustto prevent the next generation from using it all at once. However, many are doing it to promote good causes, similar to the 19th-century industrialists-turned-philanthropists.

Social Status

Intergenerational wealth is also inextricably bound up with notions of status. Middle-class families are using it as a tool to escape the economic situation and join the ever-increasing roster of highly successful individuals.
The “intergenerational” part is especially critical for this process. The economy can only support so many successful business ideas every year before it becomes too crowded. Therefore, the supply of “new money” is limited.
However, time is a great friend when it comes to building wealth. Families with sensible investment plans can double their wealth every ten years or so and wind up with thousands of times their original wealth over the course of a century or so. This slow approach is why older family members are looking for ways to ensure younger ones use money responsibly. Building a substantial net worth often requires many people longer than a typical lifetime.

Cultural Influences

The culture is also playing a role in the increasing interest in building intergenerational wealth. Expectations around money are shaping societal attitudes, and people are looking for opportunities to rise through the ranks.
The American Dream used to be a fairly quiet, limited concept. People would aspire to live in freedom and material comfort. However, it is now morphing beyond that into meaning that people can do what they want, when they want, without money being a limiting factor. This shift is driving more people to seek wealth to fulfil expectations.
That’s not necessarily a bad thing. Private investment in the U.S. is providing funds for some of the greatest businesses ever seen. However, it is encouraging people to go beyond their station in life and attempt things that would have been exceptionally challenging to achieve before.
“Intergenerational wealth and estate planning often means minimizing tax liabilities and transferring estate assets,” Lancier Legal says. “This process can be complicated when the sums involved are large. Proper estate planning minimizes risks and reduces the exposure of money to the authorities. Aspirational people are certainly making changes to how they think about money, but they require the proper professional support and assistance to avoid making potentially costly mistakes.”
So while building wealth might be an obsession, the middle class should exercise caution.
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Dexter Cooke

Dexter Cooke

Author
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide. He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina. Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations. As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all. Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
Darren Mcpherson

Darren Mcpherson

Reviewer
Darren Mcpherson brings over 9 years of experience in politics, business, investing, and banking to his writing. He holds degrees in Economics from Harvard University and Political Science from Stanford University, with certifications in Financial Management. Renowned for his insightful analyses and strategic awareness, Darren has contributed to reputable publications and served in advisory roles for influential entities. Outside the boardroom, Darren enjoys playing chess, collecting rare books, attending technology conferences, and mentoring young professionals. His dedication to excellence and understanding of global finance and governance make him a trusted and authoritative voice in his field.
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