Generational wealth and legacy transfer
I was a guest speaker at a gathering of some eminent men to brainstorm on the best way to ensure generational wealth and legacy transfer. Let me share my thoughts with you.
I was delighted when I got the invitation to be part of this epoch-making event which is no doubt relevant to our collective experience of nationhood, family and other endeavours. This Summit could not have come at a better time than now when Nigeria is in search of enduring morality and values.
The first thing to note about the transfer of anything is that you can only give what you have –quod non-habet – no one can transfer wealth that he does not have or bequeath a legacy that does not exist. So, the priority of everyone should first be to gather wealth, sustain/preserve wealth and then transfer wealth. God our creator has stated His own preference to the extent that: “a good man leaveth an inheritance for his children’s children.”
To be a ‘good man’ before God, you must have wealth and a legacy that can be inherited by your children and by others. The wealth is linked directly to your children and family whilst your legacy relates to them and beyond, such as to society. Let us, therefore, follow the precepts of God and be ‘good men’ and ‘good women’.
Before delving into this topic in more detail, it is pertinent to identify and define the Keywords used, to wit:
1. Generation; 2. Wealth; 3. Generational wealth; 4. Legacy; and Transfer.
Generation: According to Wikipedia, a generation refers to all of the people born and living at about the same time, regarded collectively as “the average period, generally considered to be about 20–30 years, during which children are born and grow up, become adults, and begin to have children.”
Without any doubt, one can say that we are in the generation of technology, or how else would you describe someone offering $44b to buy an invisible social media App majorly from an investment in which cars are driven without any engine? It is the generation of unlimited human exploration.
Wealth: This means an abundance of financial resources or physical possessions. According to Investopedia, it is an accumulation of valuable economic resources that can be measured in terms of either really good or monetary value.
Generational Wealth: This refers to assets that are passed down from parents to their children or grandchildren. These assets can be in the form of properties, bonds, monies, stocks or shares or ownership of a family business. It is generational wealth because it is wealth that gets transferred from one generation of a family to the next.
Generational wealth may also take the form of education, contacts, the ability to take greater risks and lucrative employment within a family business. It can occur on the death of a parent or other family member, or during the life of both people. While many households can expect to receive some sort of generational wealth, a small number of transfers within wealthy families accounts for a majority of the total value of generational wealth transfers.
Legacy: Legally speaking, this refers to money or properties left for a person in a Will. It also refers to something transmitted by or received from an ancestor or predecessor or from the past. Legacy is beyond material possessions and as such, Legacy may include a good name, an unblemished record or image that one has sustained, sound principles and beliefs, character, reputation, philosophy or principles, all of which can be transferred to impact society and the environment, for good.
Transfer: The learned authors of Black’s Law Dictionary define TRANSFER as follows:
1. To convey or remove from one place or one person to another; to pass or hand over from one to another, especially to change over the possession or control of. 2. To sell or give.”
In the context of generational wealth, transfer connotes the conveyance of right, title, or interest in real or personal property from one person to another, especially from the original owner, to another person linked or related to him, continuously in succession.
Legal perspectives of generational wealth transfer
Legally speaking, generational wealth and legacy (material possessions) can be transferred through a gift inter vivos, will, trusts or customary succession.
Gift Inter Vivos: A gift inter vivos simply means a gift made to someone during the lifetime of the giver. A gift inter vivos is an act whereby something is voluntarily transferred from the true possessor to another person with full intention that the thing shall not return to the donor and with the full intention on the part of the receiver to retain the thing entirely as his own without restoring it to the given.
To be continued tomorrow
Adegboruwa is a Senior Advocate of Nigeria (SAN).