Financial Planning Month

Rockefeller Vs. Vanderbilt

As we move through Financial Planning Month, let’s take a page from history.  The Rockefellers and Vanderbilts are two of America’s most well-known wealthy dynasties.  Estate planning has played a major role in the longevity of the Rockefellers’ family legacy while the Vanderbilt’s wealth has decreased to almost nothing.  The graphic below outlines some of the differences between the families regarding their financial planning, or lack thereof.

According to Nasdaq, 70% of families lose their wealth in the second generation and 90% lose their wealth in the third generation.  As outlined in the graphic below, the Rockefellers’ wealth increased from $520M to $3.3B in three generations while the Vanderbilts’ wealth decreased from $3B to $1.5M.  The stark contrast can be attributed to the Rockefeller family’s stringent view on using life insurance in their estate planning.

Many wealthy families want to establish a legacy that future generations will carry on.  Communication around an estate plan is key to establishing and maintaining family wealth.  According to Nasdaq, the biggest hurdle for creating a strong multi-generational plan is a lack of communication between generations.  Wealthy families might not want to discuss their wealth with the next generation, because they fear their children will become lazy or entitled.  If estate planning is never discussed, the next generation might be ignorant of the true value of money and be negligent in planning to sustain the family’s legacy.  Establishing trusts and implementing life insurance are steps that are used to control the distribution of wealth in a way that all generations can understand.

Financial Planning Month is the perfect opportunity to engage and educate the many individuals who have a life insurance need.  Getting a step ahead can be beneficial in the long run and we can help provide guidance.  Contact us with any questions or opportunities to help your clients achieve their goals.  This is what we enjoy doing for only a select number of families, businesses, and charitable institutions each year, and we look forward to hearing from you.