Legacy Homes-How High-Net-Worth Families Use Property for Generational Wealth

Legacy Homes-How High-Net-Worth Families Use Property for Generational Wealth

For ultra-wealthy families, real estate is far more than a place to live or a portfolio asset; it's a strategic cornerstone for long-term wealth preservation and legacy planning. And, as the global economy becomes increasingly unstable, luxury real estate has emerged as a favoured vehicle for financial growth, stability, and intergenerational continuity.

Lew Geffen Sotheby’s International Realty believes that these "legacy homes" are not just luxurious properties; they are enduring assets that carry financial, emotional, and familial significance across generations.

The Strategic Role of Real Estate in Wealth Planning

Unlike volatile financial markets or short-term business ventures, real estate offers tangible, resilient value and, for high-net-worth individuals (HNWIs), luxury properties often serve as both lifestyle-enhancing retreats and reliable investment vehicles.

Property provides multiple wealth-preserving advantages:

• Appreciation potential: Prime properties in major cities, resort destinations or culturally significant locations tend to appreciate steadily over time.
• Tangible security: Unlike stocks or digital assets, real estate is a physical asset that can’t vanish overnight.
• Tax efficiency: Real estate offers a variety of tax planning tools, including depreciation, 1031 exchanges in the U.S., and wealth sheltering trusts in international markets.

• Income generation: Properties can generate rental income through luxury leasing or short-term vacation rentals.

In the context of family wealth planning, these benefits make real estate an ideal anchor for preserving value through changing market cycles.

Legacy Homes: More Than Just Assets

Legacy homes are properties acquired not just for personal enjoyment or appreciation, but for their ability to serve future generations. These are often architecturally significant, historically meaningful or located in desirable destinations with strong long-term market fundamentals - think London townhouses, Manhattan penthouses, villas along the French Riviera or contemporary architectural masterpieces in Clifton.

They are often passed down or held in trusts for future generations, representing both financial stability and emotional heritage. These homes are sometimes custom-built with multi-generational living in mind, including separate guesthouses, dual master suites or private wings for extended family.

For many families, legacy homes become touchpoints - places where important milestones are celebrated, family traditions are passed down, and wealth takes on a human, tangible form.

Family Offices and Real Estate Investment Strategy

Family offices - private wealth management firms established to serve affluent families - play a central role in managing and expanding real estate portfolios. These offices typically oversee a wide range of investments, but property often comprises a significant portion due to its balance of growth potential and risk mitigation.

The role of the family office in real estate includes:

• Identifying long-term value markets based on global trends and demographic shifts.
• Structuring ownership to reduce tax liability and improve estate planning.
• Managing operations, especially for income-producing properties like luxury rentals or commercial holdings.

• Curating legacy assets, including art collections, land, and properties that align with the family’s values and long-term vision.

Many family offices today are diversifying across geographies - investing in New York, London, Paris, Dubai, Singapore, and emerging luxury hubs like Lisbon or Cape Town. Diversification helps hedge against local market fluctuations and political instability, while also offering the next generation global flexibility.

Property as a Hedge and Safe Haven

In times of geopolitical uncertainty, inflation or market downturns, real estate remains a favoured safe haven for HNWIs. During the COVID-19 pandemic, for example, luxury property markets in places like Aspen, the Hamptons and the Swiss Alps saw a surge in demand as families sought safe, private refuges with long-term value.

Similarly, amid economic turmoil or currency depreciation, real estate in politically stable, economically resilient countries can act as a hedge. This is particularly important for families with international interests who wish to preserve wealth outside their home country.

Legacy homes in these “safe haven” markets are often acquired with the long view in mind - not just for their immediate use, but for their resilience over decades.

Emotional and Symbolic Value

Beyond the balance sheet, legacy homes hold deep emotional value. They are often the setting for family holidays, milestones and traditions. For many high-net-worth families, property becomes a physical representation of their legacy and identity.

A home passed from one generation to the next carries stories, memories, and a sense of continuity. It provides younger family members with a connection to their heritage and a tangible stake in the family's future. That emotional connection often motivates next-generation family members to stay involved in the management and preservation of family assets.

Succession Planning and Real Estate

One of the most powerful aspects of using real estate in generational wealth strategy is its flexibility in estate and succession planning. Wealth advisors and estate planners often use a mix of tools to structure real estate holdings in a way that minimises tax exposure and maximises control, such as:

• Trusts and family limited partnerships (FLPs) to transfer ownership while retaining managerial oversight.
• Charitable giving strategies involving real estate to reduce estate tax.

• Use of life insurance and liquidity planning to offset inheritance taxes on valuable properties.

Properly structured, a legacy home can be passed down with minimal disruption to family harmony or financial health, particularly when combined with clear governance policies and open communication.

The Future of Legacy Real Estate

As younger generations begin to inherit and shape family wealth, legacy real estate will continue to evolve. Modern heirs are more mobile, digitally savvy and socially conscious than their predecessors and they may prioritise sustainability, smart technology and global flexibility when considering how to manage family real estate assets.

In response, many families are now upgrading legacy homes with green certifications, wellness-focused design and smart-home systems to future-proof their properties and align with next-gen values.

Some are also shifting legacy thinking to include not just a single "family home," but a diversified portfolio of meaningful properties - city pied-à-terres, countryside retreats or philanthropic-use properties like artist residencies or educational venues.

Ultimately, legacy homes play a unique and powerful role in the wealth strategies of high-net-worth families. They are not just luxurious residences, but enduring pillars of financial stability, emotional connection and intergenerational continuity. As the nature of wealth evolves, so too does the concept of real estate - not simply as shelter, but as legacy.

By leveraging smart planning, long-term vision and trusted advisory teams, families can ensure that their real estate assets not only preserve wealth but also reflect the values and stories they want to pass on. In the world of generational wealth, legacy homes are where life, legacy, and strategy meet.