Do you know how to build a legacy that will last 6 generations?
It’s a tall order to even attempt it.
We all have heard stories of the spendthrift heir that blows all their inheritance and dies penniless.
Well, John D. Rockefeller wanted to make sure that didn’t happen to his heirs.
Mr. Rockefeller wasn’t just an oil magnate who built his empire on kerosene, he was also an excellent strategist for making sure that his vast fortune would stay in his family for generations.
A combination of financial and legal products that in combination bypass the lifespan of each individual to create a completely separate entity that each individual benefits from but does not wholly control.
The ‘Rockefeller Method’ of estate planning combines Life insurance, an irrevocable trust and a well-crafted Family Constitution.
Here’s the high level of how it works:
The family forms a trust to hold their assets and document how they wish for their wealth to be passed on in each subsequent generation. The trust the owns and is the beneficiary of a life insurance policy on each of the family members. When each person passes, the proceeds of their policies are payable to the trust. And so it goes from generation to generation. Over time, the trust is well-funded with these proceeds and can afford the premium payments on each new family member.
The originators of the trust determine how the proceeds can be spent and under what circumstances they may be distributed to the heirs.
Families that implement this structure are not trying to leave a huge pile of money for reckless spending. Instead, this strategy requires careful planning to create incentives for how recipients of trust dividends should arrange their affairs.
This is just one example of how to arrange your affairs. The point is to actually arrange your affairs.
In short, to build a legacy takes planning and foresight. With diligent, concerted effort you can build a powerhouse for your family.
It’s not about how much money you have, it’s about what you do with what you have.