Thinking about tomorrow: The foundations for your wealth today and beyond your lifetime.
In a changing world with fast evolving societies and a population having the longest lifespan expectancy in history, it is important to consider the meaning of wealth and what you want to achieve with it so that its legacy can last. Discovering common values with the inheriting generation is the first step in cementing that legacy.
Family wealth and businesses worldwide are currently going through a historical transition from one generation to the next. An entrepreneurial generation, shaped by hard hands-on work, is ready to hand over its life-projects to a new generation, their innovative technologically driven successors.
This passing down of wealth has weighty implications on a wide range of spheres – from family expectations and personal goals to business operations.
The meaning of wealth is deeply personal
At Credit Suisse, we understand that capital in itself has no value. Creating value out of capital is the ultimate goal of every wealth holder. It is also the objective of successful entrepreneurs and profitable businesses. More often than not, their innovations have catalyzed progress without it being the end goal in the initial stages.
Both wealth creators and wealth inheritors are driven by their own personal goals and understanding each other is key.
More than ever, the younger generations are influencing the future. Their strong and organized presence with digital culture increasingly follows certain patterns. The younger generation:
- Has a vision for the future in which they actively shape and create sustainable improvements for society and the environment.
- Believes that profits can be obtained while using innovation for the common good and makes conscious decisions to make progress happen.
- Recognizes that wealth can be an instrument to reach a meaningful purpose – a catalyst for proudly leaving their long-lasting mark in the world.
The handing over of wealth from one generation to the next is not new, but its magnitude at this point in time is distinctive. Sixty-two percent of the inheriting members are in the first generation to succeed the original wealth creators. As such, the expectations from both age groups are high. So how can you ensure a smooth transition?
How to successfully hand over wealth from one generation to the next
Open dialogue and collaborative communication with each other can be an effective way to start the transition successfully, as our report "Creating a World with the Next Generation" shows.
- Establishing common family values helps enormously for members to direct wealth and business in one unified direction
- Drafting a structured family agreement resulting from open and ongoing cross-generational communication
- Setting clear expectations for everyone involved
- Appointing an experienced independent partner to guide you through the process can also help to avoid any potential areas of conflict
When thinking about the future of your wealth, it is essential that both generations exchange their experiences and valuable knowledge and to remain bonded by common family values. This provides a strong foundation for the upcoming change.