What will your legacy be?  I don’t know about you, but until recently, I hadn’t thought much about the impact I could actually have on future generations past my kids and grandkids.  It’s one thing to set up a trust (the importance of which I can’t emphasize enough, even if you mistakenly think it’s only for the wealthy!), but it’s another thing entirely to have it set up so that it continues to generate opportunities rather than simply distribute wealth.

In December, I attended the Freedom Founders conference as a guest Trusted Advisor.  I learned a lot about setting up a trust so that it can last generations.

This past December, I was fortunate to be invited to speak as a guest Trusted Advisor at a four-day wealth-building event in Dallas called Freedom Founders, which I briefly mentioned in last month’s newsletter.

Freedom Founders is the brainchild of my friend, David Phelps.  (I’ll tell you more about David shortly. He’s a fascinating person with an inspiring story!)

With every event I attend, I always look for the “golden nugget,” and this time, the nugget practically hit me square in the face.  It made me re-think how I approach my own trust, and it might encourage you to look differently at how you have yours set up.  (By the way, I HOPE you have a trust set up! If not, your legacy will be that of the person who left everyone else with the problem of handling your passing and your mess of an estate in the probate courts for years. Okay, enough of that.)

The Rockefellers vs the Vanderbilts: Only One Trust Keeps On Giving

Here is the nugget I took away from Freedom Founders’ keynote speaker, Garrett Gunderson: If you want to build a legacy that will last for generations to come, you need to do as the Rockefellers did.

The Vanderbilts established an empire, but the legacy pales in comparison to the still-flourishing Rockefeller family fortune. This is the Biltmore Estate, built by George W. Vanderbilt II.  It is the largest privately owned home in America, valued at $193M.

The Rockefellers and the Vanderbilts were the richest families of their time.  Now, six generations later, the Rockefeller trust continues to grow and be beneficial to hundreds of heirs.  On the flip side, the Vanderbilt trust was gone in two generations.  They built lots of mansions but didn’t do much on the wealth-producing side of the equation.

Unfortunately, the Vanderbilts are not the exception to the rule. Statistics show that 90% of estates don’t last past three generations, even in high net worth families.  You might be saying, “So what? I don’t have the amount of wealth that either of those families had, so how will this apply to me?”  Your amount of wealth is not important.  Here’s why.

It’s Not How Much Money You Have; It’s How You Have Your Money Set Up

The Rockefellers used two simple principles in setting up their trust that resulted in a legacy of advantages and benefits for their heirs, in perpetuity.  The beauty is that anyone can follow these principles, regardless of a person’s net worth.

Rockefeller Principle #1: Keep the money together.  Having the money stay together, rather than splitting it up among all the heirs, makes it much more advantageous to use.

Rockefeller Principle #2: Set up the trust as a bank, so it will provide opportunities for the heirs.  This allows heirs to borrow from the trust (under supervision from the trustees) with the intention of paying it back like they would a loan from the bank.  If done properly, the trust can grow and survive ad infinitum.

If you were to set up your own trust like this, you could decide what types of requests would be appropriate for a loan, but some examples could include productive endeavors such as starting a business, college and learning, skills and interests like piloting or equestrian lessons, a down payment for a home, or any other things you and the trustees feel fit the instructions you leave behind.

Creating a Legacy of Opportunity

Instead of leaving wealth to the next generation, making them feel like they’ve won the lottery, you’ll be leaving them with something even more valuable: a legacy of opportunity.  This way, the trust serves as a tool for all the heirs, giving them a leg up in the world, without the heirs becoming a burden to the trust.  Isn’t that what we really want for our future generations — for them to experience the sense of pride and self-efficacy that comes from earning and achieving on their own, rather than getting a one-time gift?  This strategy also prevents heirs from viewing the trust as an entitlement, which often results in the heirs producing very little or nothing of value on their own.  Most of us are in the position we are today because someone gave us a helping hand (not a hand out) that may have changed the destiny of our lives, or at the very least, propelled us forward faster than we could have done on our own.

If you want to learn more, I would suggest reading Garrett’s book, What Would the Rockefellers Do? How the Wealthy Get and Stay That Way… and How You Can Too.  He also goes into detail about how you can use whole life insurance as your own bank while you are alive and leave a legacy of sustainable wealth for generations to come.  I’ll be sure to share that information with you in future articles.

I promised to tell you more about my incredible friend, David Phelps.  I met David 7 years ago in Chicago at a business marketing event.  We’ve reconnected over the past few years on the networking cruises and other business group trips.  (Funny enough, on one of those cruises, my co-founder, Steve Sixberry, and I met our South Carolina mobile home park partner.  You just never know who you’re going to meet at a networking event.)

This is David’s daughter, Jenna, as a happy, healthy adult!  They’ve all come a long way since her life-threatening disease at the age of 12.

David had a successful dental practice for years until his 12-year-old daughter, Jenna, contracted a life-threatening disease.  While Jenna was in the hospital waiting for an organ transplant, David had ample time to reflect on his busy life. He realized that he no longer wanted to spend long hours away from his family, so he sold his dental practice.  David had always been a real estate investor, so he started down that path as a new career and soon realized that it was his passion and calling.  This led him to create Freedom Founders, an organization that helps other medical professionals build wealth through alternative investments.

Now, Jenna is an adult and doing great, and David helps doctors do what he did – build, run, and sell their practices, and ultimately, live more of life. This is fitting, because the theme of the event I attended was “how to build a legacy.”  David has set up a smart, savvy group of masterminds who help each other out at the Freedom Founders events.

It was quite a privilege to be there as a guest Trusted Advisor and to participate in all of the activities and learning events.  (Since the event, I’ve become a full Trusted Advisor, serving as an official alternative investment advisor to the group.  Thanks, David, for the opportunity!)

In future articles, I’ll share more about what I learned at David’s event.  Stay tuned!