Nearly every article on the Great Wealth Transfer discusses how the Silent Generation and Baby Boomers are poised to transfer about $84.4 trillion in assets through 2045, with $72.6 trillion going directly to heirs, according to Cerulli Associates.
But how the ultra-wealthy perceive wealth could have implications for others. Many goods and services, initially exclusive luxuries for the ultra-wealthy — such as electricity, indoor plumbing and refrigeration — are now taken for granted by the broader population. How the ultra-wealthy think about wealth today will shape how the broader world thinks about it tomorrow.
In the book Complete Family Wealth, co-authors James Hughes Jr., Keith Whitaker and Susan Massenzio recount a wise grandmother's words: "Our family has always been rich, and sometimes we've had money." This statement encapsulates a perspective long held in ultra-wealthy circles, now reaching a wider audience. True wealth for an individual, household or family lies in their well-being — a flourishing family unit.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You might wonder how to apply this concept in your own family. Complete Family Wealth provides a framework, The Five Forms of Family Capital, which we'll modify slightly for a more actionable approach to wealth transfer beyond just money. Additional insights can be gleaned from organizations like the UHNW Institute and ideas such as Wealth 3.0.
Here's a brief explanation of each form of capital, along with economical and generous ways to implement them:
1. Cultural capital (spiritual capital): Reflects the family's shared vision (purpose, values and roles).
Economical: Order pizza, grab some scrap paper and dedicate a Friday night to drafting your personal, household or family vision. TFM defines vision as purpose plus values plus roles. Don’t worry about getting it perfect, just get started.
Generous: Arrange a family retreat with an external facilitator, combining vacation elements with sessions to refine individual, household and family visions.
2. Human capital: Promotes the physical and mental health of family members.
Economical: Take a family walk or hike without phones (except one for emergencies). This is a simple way to enjoy one another’s company and the benefits of exercise.
Generous: Enroll in fitness classes together (yoga, spin, boot camps, kickboxing, etc.). If a family elder can sponsor, even better. This is a fun way to emphasize the value of physical health.
3. Social capital: Strengthens a family’s relationships and their ability to make decisions together.
Economical: Start a family book club or movie night, alternating choices among members. It's an opportunity to deepen discussions beyond the usual topics. Books we suggest starting with: Generations by Jean Twenge or The Good Life by Robert Waldinger and Marc Schulz. Movies could be Defending Your Life or Dead Poets Society.
Generous: Virtual family game night with a game-show host. This isn’t as expensive as you’d think, and you can’t beat the convenience of a company like Playful Humans. We’ve found 8 p.m. on a weekday night, planned four to six weeks in advance, as a universally doable time for all life stages.
4. Intellectual capital: Shares the collective knowledge, experiences and wisdom of the family.
Economical: Have someone in your family teach a class about what they know to the rest of the family. This could be Uncle John teaching everyone to hit a golf ball, Aunt Mary teaching about making the world’s best cupcakes or Grandpa Pete teaching everyone to drive a stick shift.
Generous: Create a private family podcast. It has never been easier to record and edit audio and never been cheaper to preserve the audio in a way that it can be used later. All you need is some basic equipment/software, a passionate member of the family to do the interviewing and some willing subjects to be interviewed. Some of the questions we love are around wisdom: What has your life taught you about love, success, happiness, leadership, etc.?
5. Financial capital: Refers to cash, securities, real estate and other traditional assets.
This is a well-trodden path with plenty of complexity. Consult your financial team for tailored advice.
These initiatives all demand time investments. Consider dedicating 30 minutes to an hour a month preparing for your family’s “wealth transfer.” Reflect on the optimal allocation of your time across these capitals.
While most people focus 95% of their effort on financial capital, this alternative framework offers a broader perspective on legacy. What you choose to do with it is entirely in your hands.
Related Content
- Think of Retirement as the Goal, Not the Vision
- The Five Stages of Retirement (and How to Skip Three of Them)
- Five Things I Wish I’d Known Before I Retired
- Retirement Is a Journey: Do You Have the Map?
- To Create a Happy Retirement, Start With the Three Ps
-
Investors Buy the Nasdaq's Big Dip: Stock Market TodayStocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
What to Know About Portable MortgagesA closer look at how portable mortgages would work, who might benefit and why the concept is gaining attention amid high rates and limited supply.
-
Here's How to Plan This Year's Roth Conversion, From a Wealth ManagerWhile time is running out to make Roth conversions before the end of the taxable year, consider taking your time and developing a long-term strategy.
-
Four Times You Need a Second Opinion on Your Financial PlanIs your financial plan fit for purpose — or is your adviser peddling an outdated strategy? When you see these red flags, it's time for a second opinion.Evan
-
'But It's Not My Fault!': Your Insurance Company Absolutely Will Blame You in These Five ScenariosInsurance companies care about 'fault' in more ways than you think — from payment mishaps to your neighbor's landscaping — so it's on you to manage the risks.
-
How to Calm Your Retirement Nerves When It's Time to Shift from Savings Mode to Spending ModeTransitioning from saving to spending in retirement can be tricky, but devising a strategic plan can help ensure a smooth and worry-free retirement.
-
Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who KnowsFamilies need to prepare heirs through communication and financial know-how, or all that money could end up causing confusion, conflict and costly mistakes.
-
Private Markets for Main Street: What Financial Advisers' Clients Need to KnowWith product innovation 'democratizing' private market access for everyday investors, advisers must step up their game to educate clients on the pros and cons.
-
Seven Practical Steps to Kick Off Your 2026 Financial PlanningIt's time to stop chasing net worth and start chasing real worth. Here's how to craft a plan that supports your well-being today and in the future.
-
A Retirement Plan Isn't Just a Number: Strategic Withdrawals Can Make a Huge DifferenceA major reason not to set your retirement plan on autopilot: sequence of returns risk. Here's how to help ensure a bad market won't sink your golden years.
