Breaking the ‘Shirtsleeves’ Curse

Breaking the ‘Shirtsleeves’ Curse: A Guide to Preserving Your Family’s Wealth and Financial Legacy

For families who have accumulated sizable estates, one of their greatest concerns is passing down that wealth to the next generation in an effective manner.

There’s a common saying, “shirtsleeves to shirtsleeves in three generations,” which refers to the idea that grandparents work hard to build wealth, but it’s squandered and spent by the time their grandchildren receive it.

Families often lack proactive planning for preserving their wealth, which means the next generation may not appreciate the work it took to build the family’s nest egg. Even more devastating than not under-standing how the wealth was created is the possibility that they won’tknow how to handle it responsibly.

The question is, what can you do to help the next generation be responsible stewards of their wealth? The answer is pretty simple. Communicate, educate, and create safeguards that set them up for success.

The silent wealth killer: how lack of communication can erode family prosperity

Many folks see money as a taboo topic, which means you may never have talked to your family about how you created your wealth and the type of legacy you’d like to leave. Don’t assume your kids know what you want unless you tell them.

Work with a financial advisor who can help facilitate these tough conversations. Use this opportunity to introduce your family to your advisor, and encourage them to maintain a relationship in the future.


Financial literacy doesn’t come naturally, and it’s not typically taught in school. Take it uponyourself to educate your family members about basic financial concepts like budgeting and saving for long-term goals. Go beyond the basic and discuss financial values. How we spend our money is often a reflection of what we hold dear, so make sure your spending and values are in alignment.

Establish safeguards

Receiving a lump sum of money may be overwhelming and can lead to impulsive decision-making. If you’re concerned that your heirs may have trouble managing their inheritance wisely, consider setting safeguards in place—namely in the form of trusts.

With trusts, you can establish certain parameters that help your children receive financial support when they need it without making them responsible for managing the entire family fortune all at once. Make sure to consult with a lawyer who specializes in trusts if you think this might work for you. (This article is for educational purposes only and does not constitute legal or tax advice.) If you’re concerned about helping the next generation be good stewards of wealth after your passing, call our office at (02) 624-2788.

Douglas Goldstein, CFP®, GFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

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