Ten Best Practices for Building Sustainable Wealth

1. Clarify the Purpose of the Wealth

Advisors should work with clients to explicitly define the function behind the wealth. Is it about providing educational and business opportunities? Leaving a philanthropic legacy? Or like Uncle Phil from Fresh Prince, providing for his family's financial independence? For example, if the purpose of the money is family unity, have clients consider actions that promote that goal, such as purchasing a family vacation home with money set aside to fund travel for family members to the destination.

5. Avoid a Transactional Approach

While distributions to family members can maximize tax breaks, being unclear about the intention and purpose of financial gifts can have long term consequences, as gifts that lack context are more likely to be viewed as subsidies. That can mean avoiding automatic disbursements. If children are unmotivated, the disbursements may enable procrastination, rather than promoting personal development. But, as Lucious Lyon discovers, changing inheritance plans for a child who isn’t working toward a goal should be a method used to guide children toward productivity instead of as a punitive approach.

8. Focus on Outcomes

Advisors can help wealthy investors succeed by working to align their priorities with desired outcomes, instead of organizing financial priorities sequentially. Tethering a plan to a chronological timeline is actually less effective for achieving long-term goals. Most of the Ewing family wanted to keep Southfork Ranch always in the family and made plans to keep the property, even after J.R. lost the business. Clients should intentionally put their values front and center of their financial life, so the most important goals don’t get sidelined in favor of the next thing on the schedule.

Copyright Getty Images

9. Importance of Philanthropy

For those who have never had to scrimp and save, money doesn’t carry the same meaning as it does for those who have, like the Clampetts. For most, the best way to gain and maintain perspective on the value of money is through philanthropic endeavors, rather than lectures on the value of a dollar. Seeing the benefits of writing a check or volunteering for a non-profit or charitable organization can help children understand the impact wealth can have, as well as add value to personal spending choices.

10. Build and Maintain a Team

Having a diverse team in place can help families make decisions that are in everyone’s best interests. Usually that consists of at least one financial advisor, an estate attorney, a CPA and a respected family officer. Taking a team approach can help mediate conversations, ensure everyone’s voice is heard and serve as a system of checks and balances.