Generational wealth consists of assets, possessions, and money that are passed down from one descendant to the next and that each generation builds on. A family business is the first thing that comes to mind when many think of generational wealth. Vineyards, orange groves, tobacco plantations and sugar mills started by ancestors centuries ago continue to be passed down to their children who build on them and pass them on to their descendants in the form of inheritances.

Sadly, African Americans have been left behind, at a disadvantage, when it comes to passing down generational wealth due to the history of slavery. African Americans have made incredible strides in many areas, but generational wealth is one we need to catch up on.

One of the fastest ways to pass on wealth to the next generation is to take out a simple life insurance policy. Parents, especially those who do not have the means to leave an inheritance in stocks, real estate, and businesses, can certainly make up for lost time and leave their children an inheritance in the form of a life insurance policy.

A six figure policy, like $100,000, can cost less than a couple hundred dollars PER YEAR. A $750,000 policy can cost less than $50 per month. (Age and health conditions will be the determining factors when it comes to the costs of insurance premiums.)

Many experts, like Clark Howard and Suze Orman, prefer term life insurance over whole life. (To learn more about the term versus whole life, do a quick internet search.)

Regardless of the dollar amount of the policy you choose, or the type of policy you choose to leave behind for your children, consider leaving instructions with the money so that the inheritance can trickle down into the lives of generations beyond your own children.

For example, a will or trust (preferred) may be left with specific instructions or special stipulations that an executor can oversee and ensure are carried out before money is distributed to beneficiaries.

Here are some ideas for special stipulations that parents can consider when leaving an inheritance for their children in the form of life insurance:

–Malik Jr. will receive X amount of dollars upon completing 4 years of college.

–Malik Jr. will receive additional funds in the amount of X dollars for successfully operating his own business for three consecutive years.

–Samantha will receive X amount of dollars upon completing a Master’s program.

–Samantha will receive additional funds in the amount of X dollars after she purchases her first investment property.

–Both Malik Jr. and Samantha will receive final payouts in the amount of X dollars upon proof of obtaining life insurance policies for their own children (or, if they have no children, children of close relatives).

You can add special stipulations from the simplest to the most complex. The point, the goal, should be to push kids into businesses that help them build future wealth that can be added to (real estate, businesses) and passed down to the next generation.

Of course, consult with competent professionals who specialize in financial planning, wills and probate so that your plan of action is solid.

Much success to you in developing an action plan to build generational wealth for your family. And congratulation’s; you can be the beginning of something great that can positively impact the fabric of our community as a people forever.