Inheritance and the Art of Legacy Planning

I have previously posted an article: Estate Planning and Legacy Planning: is there a difference?  It seems that others agree that there is a significant difference.

A cautionary term that comes to mind in legacy planning is: “ from shirtsleeves to shirtsleeves in three generations”.  Wealth will be acquired in one generation and will be depleted by the third generation.  This is a universal phenomenon and there is a similar warning in many cultures:

Italy- “from stalls to stars to stalls”;

China- “from peasant shoes to peasant shoes”;

Scotland- “”the father buys, the son builds, the grandchild sells, his son begs”;

Spain- “who doesn’t have it, does it and who has it misuses it”

Lancashire, England – “there’s nobbut 3 generations atween a clog and a clog”

(I would be delighted to learn from my followers about other adages referring to this topic!)

So we have multicultural prophecies about family fortunes eroding over time; wealth acquired in one generation has the potential to  quickly be misused.

But we have proof that these dire predictions need not be fulfilled. Look to families like Ford and Carnegie and you will see the bright future of a family legacy and their philanthropic endeavors of monumental proportions.

When leaving your children an inheritance, often they lack the tools to manage that inheritance.  Within one or two generations the inheritance has been used up.  What future generations lacked is the education and the value structure to preserve and build upon the inheritance.

With this in mind, financial and wealth management advisors are placing emphasis on leaving a financial legacy rather than an inheritance comprised of investments, businesses and real estate.  They are also attempting to create a bridge from one generation to another by focusing not only the parents’ financial well-being, but also on the financial education of the adult children.  Gone are the days when an inheritance meant solely “entitlements” and “gratification” to heirs.  Parents and grandparents are maintaining control (even after death) and passing on a mindset to their heirs.  The mindset often emphasizes education, capital preservation and philanthropy.

You do not have to be wealthy to leave a family legacy.  Even a modest estate can be a tool for passing on more than money to future generations.  Frequently, I discuss with families the future of their treasured family heirlooms.  Those objects might not have significant monetary value, but they are filled with the memories and the lessons of previous generations.  Those items tell a story, and often pass on family values to the heirs.  When making a Will, remember the concept of financial legacy and pass on more than just funds to future generations.

Working to Preserve Your Wealth and Protect Your Future in a Constantly Changing World.

This post has been brought to you through the Law Office of Barbara Ann Dalvano.  This information is provided for educational purposes only and to generate ideas, provoke thought and facilitate conversation.  It is not intended to create an attorney-client relationship.  Each person’s situation is different and this information should not and cannot be relied upon as legal, tax, accounting or investment advice.  Please read the entire disclaimer for more important information.

Barbara Ann Dalvano, Esq.

Phone and Text Message:  (719) 963-2933

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About Attorney Barbara Ann Dalvano

Attorney in Denver, Colorado with extensive practice experience in the areas of Estate Planning, Wills and Trusts, Business Succession Planning, Probate, Contract Law.

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