I came accross an interesting article in today’s New York Times that discusses For Those Born Rich, Lessons in How to Stay That Way

Is money, financial assets or land the bridge to everlasting wealth? When I ask my wealthier clients what is most important to them - how they earn and retain wealth - money is usually not the answer. Instead they list a variety of attributes - such as hard work, dedication, education and the experience of hard knocks. “I can lose everything that I have,” a client once told me, “and I can get it all back again in just a few years.” That client knows that it is not the money or the assets that are important, but it is the knowledge and experience.

How does one transfer his or her knowledge and experience to his or her children and grandchildren? Can you do it in your estate planning? I think that you can. While no will or trust can be written in such detail as to impart experience and knowledge on succeeding generations, the actual plan itself can encompass these attributes.

For example, your estate planning documents can include trusts for education, or distribution incentives tied to earned income. If philanthropy is important to you, a private family foundation allows you to impart your values while including family members in major decisions - such as how the foundation dollars should be invested and what charities should receive endowment income.

I’ve been a long proponent of having a sound succession system in your documents for successor trustees in the event of your disability. As part of your estate plan you might include an introduction of your financial advisors to your descendants so that they won’t be strangers in the event of an illness or death. Moreover, if you were to show your children and grandchildren how you choose to invest and who you trust to help you make these investment decisions they will be that much farther along with their own assets, hopefully avoiding some of the mistakes you have made along the way.

If real estate or a family business constitutes a good portion of your wealth, it is never too late to describe how you built these assets and what it takes to manage them into the future. If you haven’t done so already, your estate plan can convey this knowledge and experience by creating family partnership agreements that detail how you would like these assets managed, and by transferring small portions of the partnership to family members now, including them in major decisions so you can get a feel for how they might choose to act if you weren’t around any longer.

Those that I’ve had a conversation about transferring what is important to younger generations have successfully implemented many of these strategies. I hope they’ve given you some food for thought.