I’m a Financial Advisor: 3 Ways To Prepare Your Kids for Your Generational Wealth

Being in the position to help your children financially is one of the greatest privileges there is. Passing on generational wealth is a way to provide them with security long after you’re gone. However, this financial transfer shouldn’t be taken lightly.

Trending Now: 10 Genius Things Warren Buffett Says To Do With Your Money

For You: 6 Subtly Genius Moves All Wealthy People Make With Their Money

GOBankingRates spoke with Stoy Hall, certified financial planner (CFP) and the CEO of Black Mammoth , to discuss some ways you can prepare your kids for your generational wealth. He said, “Worried about your kids becoming the next headline in a ‘rich kids gone wild’ story? Let’s dive into three game-changing strategies to ensure your wealth becomes a launchpad, not a crutch.”

Read on for his insights on passing down generational wealth .

It's Going Viral: Want to Retire Rich? Suze Orman Says You're Missing This Key Money Move

Education Is the Foundation

“First and foremost, all families, doesn’t matter if you have a lot of money or not, should be having family meetings,” said Hall.

He suggested these family meetings should be monthly, and noted that they are crucial for several reasons. “It brings the families together and understanding that there is one singular goal to achieve. It’s the transparency and education for the kids, because they’re going to ask questions.”

To this end, open communication is essential. “You need to be able to educate your own children. Do not rely on the schools or social media,” he said. “And explaining what we’re doing and why we’re making this decision.”

Similar to when you have big events or decisions to be made financially, he noted these should be talked about as a family unit. Hall offered his personal life as an example.

“For us in my family, we usually go to Hawaii every year for two weeks in June. Next year we won’t be. And so we explained to our children why,” he said. “Why? Because we’re going this year for Christmas. And that your sports are becoming more cloud-like in traveling. So there’s more costs.”

His bottom line on education: “Kids are sponges. They need to know. They want to know. And if we don’t teach them as parents, then what are we doing?”

Up Next: I’m a Self-Made Millionaire: 6 Steps I Took To Become Rich on an Average Salary

Create a Trust for Future-Proof Wealth

Hall recommended creating a trust that is designed for future generations. “And I don’t just mean your children. Your children’s children and their children’s children and creating a truly generational wealth type situation.”

He also noted that parents can opt for trust stipulations. “You can put in stipulations, right? Hey, from the trust you can only get X amount of dollars of income each year until you reach 30. When you’re at 30, it goes up, when you reach 40, it goes up, when you reach 50, it goes up.”

Hall continued, “Or when you get married, the trust will pay for your wedding or college, or when you reach a full-time job, you get X amount of dollars as well.”

He added that your goal with trusts is to have a lot of different ways your kids can have access that can help train and educate them, while not just giving them a lump sum of money that ends up being wasted.

Build Your Team — The Family Office Approach

“You need to have a team behind you,” said Hall. “A team that you trust.”

He added, “At Black Mammoth, we are a modern family office. So I think all families should have a family office within those units. You’re going to have your attorneys, your accountants, your insurance advisors, et cetera, with an overview and overarching person that you trust that can help run and manage all of those scenarios.”

Hall noted there’s a long-term benefit to having access to this kind of team. “So that way when you pass and your kids are inheriting everything, they already have a built-in team that they’ve known their entire lives, who they can trust to help make the right decisions to continue doing what they want to do and love without being bogged down with this inheritance, as well.”

The Bottom Line

“All in all, educate,” Hall advised. “Design some type of trust family office for yourself and create a team that is with your kids and your family throughout time. That will allow the generational wealth inheritance to continue to grow and to continue on for generations and generations.”

This article originally appeared on GOBankingRates.com : I’m a Financial Advisor: 3 Ways To Prepare Your Kids for Your Generational Wealth