5 Tips for Building Generational Wealth
America is in the midst of the greatest wealth transfer in history. Over the next decade, an estimated $80 to $100 trillion will pass from baby boomers to their children...
This story originally appeared on Due
America is in the midst of the greatest wealth transfer in history. Over the next decade, an estimated $80 to $100 trillion will pass from baby boomers to their children and grandchildren. But one critical question remains: Will their heirs be ready for it?
A 2023 study by AMG National found that 90% of inherited wealth disappears by the third generation. That sobering statistic is leading more families to ask: How do we build wealth that actually lasts?
Financial advisor and author John Nebeker believes the answer lies in adopting a strategy used by some of America's wealthiest dynasties: the Family Bank. In his book The Family Bank: The Key to Generational Wealth, Nebeker shares how families like the Rockefellers used this approach to grow wealth while preparing future generations to be responsible stewards, not entitled heirs.
Here are five key tips from Nebeker for building real generational wealth.
1. Rethink Your Estate Plan
Traditional estate plans often fall short. They might protect your money from external threats, but they rarely account for internal ones, like mismanagement, entitlement, or family disputes.
'Traditional planning does a lousy job fulfilling people's wishes,' Nebeker said. 'Spendthrift heirs often dissipate whatever is left of the estate.'
If you've already set up a plan, don't worry—it may still be adaptable. Talk to your estate attorney or financial planner about aligning your plan with longer-term family wealth goals.
2. Replace Entitlement With Opportunity Through a Family Bank
A Family Bank is a nontraditional structure that allows families to retain and grow assets over time while providing support to future generations. Instead of handing out inheritances, the family makes structured loans to heirs to fund things like education, business ventures, or home purchases.
'Families replace gifts with loans, and entitlements with opportunities,' Nebeker said.
Many successful families use trusts to manage their Family Bank. Trusts can help reduce estate taxes, ensure legal protection, and maintain generational financial control.
3. Talk About Money—Yes, Really
Many parents avoid talking to their kids about inheritance plans. But keeping financial plans secret can do more harm than good.
'Money can drive people apart, but with wise design, it can also bring them closer together,' Nebeker said. 'It's possible—even probable—to make money a unifying force in your family with the right structure.'
Start by communicating your goals and expectations. Invite family members to participate in discussions so they understand the plan and its values.
4. Choose the Right People to Manage the Family Bank
A Family Bank typically has a 'Bank Board' or trustees who oversee assets and make decisions about loans and investments. These individuals are often family members, but can also include outside advisors.
'The selection of trustees may be the deciding factor in whether a Family Bank is successful,' Nebeker said. 'They need to manage assets, stay connected to the family, and uphold the founding principles.'
Regular board meetings and clear communication help keep the structure transparent and effective.
5. Invest in Financial Education for the Next Generation
A lasting legacy requires more than money—it requires knowledge. The Family Bank model emphasizes preparing heirs to be financially competent and mission-driven.
'Training young members is a cornerstone responsibility of the board,' Nebeker said. 'When they experience firsthand what it means to borrow, invest, and give responsibly, they are far more likely to succeed.'
A well-structured Family Bank can give heirs the tools to grow wealth, give back to their communities, and honor the family's values.
Final Thought: You Can Build Wealth That Lasts
Generational wealth isn't just about passing down assets—it's about passing down vision, values, and responsibility. With the right strategy, your legacy can empower future generations instead of burdening them.
'The Family Bank is about creating opportunity, not entitlement,' Nebeker said. 'That's the key to wealth that lasts.'
Featured Image Credit: Photo by Los Muertos Crew; Pexels
The post 5 Tips for Building Generational Wealth appeared first on Due.
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