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Human and Intellectual Wealth

Legacies are often described in terms of material wealth.
But legacies are established, nurtured, and sustained solely by Human and Intellectual wealth.

Legacies cannot be guaranteed nor can they be mandated because the obstacles to creating a legacy abound. Legacies require the establishment of a clear vision, a plan that reflects every family member as well as the family as a whole, a strong family governance mechanism, and a team of advisors that have the wisdom to guide and support the family through multiple generations. But there is one obstacle that rises above the rest in terms of its ability to separate the 1 out of 10 family from the other 9.

The transition from one generation to the next is, by far, the greatest challenge families confront.
Not so much the transition of Financial wealth, but the transition of Human and Intellectual wealth.

 Legacy-minded families recognize that the family’s Human and Intellectual capital will always provide opportunities to create financial capital, if supported appropriately. Therefore, they focus on the transition of one generation to the next primarily through the lens of the Human and Intellectual transitions, not so much the transition of the Financial wealth.

What do we mean by Human wealth?

 While there are various definitions of Human wealth, we define Human wealth as the inherent value each family member has, simply for being a family member. The family is, after all, only possible because of its members. Therefore, its members are valuable simply because they facilitate the family’s existence. Beyond that, however, family members are valuable to their families because of each family member’s individual values (see the section on Values), personality, passions, goals, experiences, and beliefs. As family members, we not only allow our family to exist, but we bring unique qualities to the family, which, when combined, give the family itself unique qualities. The uniqueness of each family member and the uniqueness of the family unit is the embodiment of Human wealth.

While this might seem simple on the surface, consider the following questions:

  • How does a parent help their child(ren) accept, let alone embrace, the family culture, values, and method of operation while at the same time, encouraging their child(ren) to express their own individuality?
  • How does a family resolve a conflict between an individual’s uniqueness, and the family’s requirement for shared values, culture, and method of operation?

We call it the “Family / Individual Paradox”.
In our opinion it is the most mis-understood aspect of creating a legacy.

Every parent will struggle with it at some point, but few acknowledge the importance of solving the paradox. Fewer still will conscientiously address it through the development and implementation of a family mission and structure that simultaneously promotes family cohesiveness while recognizing (and celebrating) a family member’s individuality. This is no small task. We know from experience.

 What do we mean by Intellectual wealth?

Intellectual wealth can mean lots of things, but most often it’s described as “education”. Education is certainly a critical component, but Intellectual wealth is more than that. In addition to education, Intellectual wealth is a family member’s inherent intellectual capacity to think and solve problems. We define it as the application of a family member’s intellectual capacity and education to their own lives, their family, and their community. Therefore, unlike intelligence and education, which are passive, Intellectual wealth is active, applied, and alive.

The most obvious example of Intellectual wealth? An adequately prepared heir.

We all know families with members who were ill-equipped to receive their inheritance, regardless of its size. In fact, 2 out of 3 inheritances are completely exhausted within 18 months. This shouldn’t be all that surprising when one considers the taboo nature of a family’s financial wealth. We see this all too often.

Parents are reluctant to discuss the family’s financial situation with their children, and as a result, also fail to discuss the more important aspects of the family’s wealth (their own Values as they relate to money, financial experiences, struggles, failures, successes, and lessons learned). As a result, children are often ill-prepared to manage a sudden influx of money. In many cases, the inheritance is not a gift, it’s a burden. In some cases, an inheritance is a curse that robs the heir of ambition and/or individuality.  A sudden influx of money doesn’t build character, it reveals it.

 What is most often lost during a generational transition?

Family leadership, the endowment of values, culture and history, and the lessons learned from experience.
In other words, Human and Intellectual Wealth.

We help families recognize the importance of, and cultivate, their Human and Intellectual wealth. In some respects, this aspect of wealth management is more rewarding for us.

If you’re interested in learning about how successful families preserve and pass along their Human and Intellectual wealth, we encourage you to review the following sections:

  • Values – A family’s values embody the foundation of the family’s wealth. Values give the family direction and support. Values are a family’s DNA. Extracting the underlying, often hidden, values requires a purposeful process that goes beyond a brief consideration and simple conversation. Family values are simultaneously the family’s values collectively, as well as the values of each individual within the family.
  • Purposeful Estate Planning – The estate planning process as we know it fails almost every family that engages in it. Why? Because the process is almost entirely focused on minimizing the tax burden during a generational transition, the least important aspect of a family’s legacy. Purposeful estate planning supplants this inferior aspect with a focus on expressing the family’s values, and facilitates an effective transition of human and intellectual capital from one generation to the next.
  • Philanthropic Planning – Philanthropic planning has a clear benefit for the community. But legacy-minded families also realize that philanthropic planning is one of the best tools a family can use to perpetuate both human and intellectual wealth within its own family. In most cases, when philanthropic planning is used to benefit both the family and the community, the benefit to both is even greater than it would be if the family was doing it purely for the benefit of the community. There is indeed a selfish side to philanthropy.

If you want to learn more about the importance of Human and Intellectual Wealth, find yourself asking any of the above questions, or have your own questions and would like answers, we encourage you to contact us only to answer your questions, not to sell you our services.

If you’re not ready to contact us but would like to learn more about the importance of Human and Intellectual Wealth, we encourage you to review the following resources:


  • Wealth in Families by Charles Collier
  • The Legacy Family by Lee Hausner and Douglas Freeman
  • Beating the Midas Curse by Perry Cochell and Rodney Zeeb with William Eck
  • Your Legacy: Meaningful Estate Planning by Steven R. Owens, J.D.
  • Family Wealth: Keeping it in the Family by James E. Hughes Jr.
  • Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values by Roy Williams and Vic Preisser
  • Raising Financially Fit Kids by Joline Godfrey