Ethan R. Okura
Hawai‘i Herald Columnist

Are you familiar with the proverb, “Shirtsleeves to Shirtsleeves in Three Generations?” Or maybe you’ve heard the saying as: “Rags to Riches to Rags in Three Generations.” The ancient Chinese version of this proverb is Fu bu guo san dai, which roughly translates to, “Wealth does not sustain beyond three generations.”

Various cultures throughout history have seen this same pattern. The first generation works hard, creates success and builds wealth; the second generation preserves it and transfers it; and the third generation (or sometimes subsequent generations) spends it until it is completely depleted.

Why is this pattern so universal? Is there anything we can do to change the outcome? In this month’s column, we’ll examine this phenomenon and see how the outcome can possibly be reversed.

At our firm, we see many families’ estates — some through multiple generations. The fundamental problems here are education, knowledge, and personal or family values. We often encounter this situation in our clients’ lives, whether the estate represents a modest amount of wealth (under $1 million dollars, including the home), or financial success worth hundreds of millions of dollars.

In most cases, the generation that created the family wealth has deeply ingrained values of thrift, frugality, hard work and tenacity. They truly appreciate the value of a dollar because they know first-hand how hard they worked to earn it and to save that first bit of capital that they used to create the financial success they ultimately achieved. Oftentimes, the second generation grew up with very little and saw their parents work hard to achieve their success, benefiting from it only later in their lives, if at all. The third generation usually begins their life accepting the fact that their family has access to money and other resources. They tend to not ever know financial hardship in the same way as their parents or grandparents. Sometimes they are spoiled as children or grow up feeling that they are entitled to the best of everything.

To read the rest of 7/20’s article, visit Ethan’s website here or subscribe to The Herald!

*For more information on Ethical Wills/Legacy Letters, see the following web pages:


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Ethan R. Okura received his doctor of jurisprudence degree from Columbia University in 2002. He specializes in estate planning to protect assets from nursing home costs, probate, estate taxes and creditors.

This written advice was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to U.S. Treasury Regulations governing tax practice.)

This column is for general information only. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate planning specialist.


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