Perspective | The Way of Wealth Inheritance in the Wisdom of Traditional Chinese Studies - Enlightenment from Traditional Chinese Culture on the Protection and Inheritance of Wealth for Modern Entrepreneurs
Published:
2025-05-06
Inheritance is an eternal topic. The continuity of Chinese civilization for five thousand years relies on inheritance; the preservation of the fine traditions of the Chinese nation also relies on inheritance. Many famous sayings, proverbs, and allusions about inheritance are also prevalent in traditional Chinese culture. The author wishes to use the past to enlighten the present, prompting modern entrepreneurs to think about the protection and inheritance of their own wealth, and to encourage a transformation from the initial awareness of inheritance to a comprehensive mindset of inheritance.
Inheritance is an eternal topic. The continuous 5,000-year history of Chinese civilization relies on inheritance; the preservation of the fine traditions of the Chinese nation also relies on inheritance. Many famous sayings, aphorisms, and allusions about inheritance are also prevalent in traditional Chinese culture. The author wishes to ‘use the past to speak to the present,’ inspiring modern entrepreneurs to reflect on the protection and inheritance of their own wealth, prompting them to transform from a nascent awareness of inheritance to possessing a comprehensive mindset of inheritance.
The term ‘inheritance’ is often confused with ‘succession’ and is not easily understood by everyone. The author believes that, according to the provisions of China's Civil Code, ‘succession’ refers to the conversion of a deceased person's property into inheritance after the death of the deceased, with the heirs accepting the inheritance. In this case, ‘inheritance’ has the connotation of passive acceptance; while ‘passing on’ refers to the process of the deceased, while alive, actively considering their own wealth and through active planning and arrangements, initiating an active transmission. Of course, the will in succession, as one of the tools for inheritance, also requires the active participation of the deceased.
The ‘inheritance’ we are talking about now mainly addresses three issues: ‘what to pass on,’ ‘to whom to pass it on,’ and ‘how to pass it on.’
Regarding ‘what to pass on,’ The first thing that comes to everyone's mind is certainly ‘passing on wealth,’ and the narrow sense of wealth inheritance is the inheritance of money, real estate, land, and company equity, etc., quantifiable and solidified material things. In fact, the broad sense of wealth inheritance also includes the inheritance of spiritual and cultural aspects, such as the inheritance of family style, family precepts, family culture, and corporate culture. “Leaving your son a full ingot of gold is not as good as leaving him a single classic” (proverb, from the Han Shu, Wei Xian biography). Wei Xian was a famous Confucian scholar in the Han Dynasty, proficient in The Classic of Poetry and served as prime minister. His youngest son also became a prime minister because of his mastery of classics. The Wei Xian family passed down classics, and four generations held the rank of the highest government officials. In the eyes of the ancients, cultural inheritance was superior to material wealth inheritance. “A family that accumulates goodness will surely have abundant blessings; a family that accumulates evil will surely have abundant misfortune.” (excerpt from the Book of Changes) The Book of Changes emphasizes that moral inheritance is more important than wealth itself; the key to blessing future generations lies in cultivating virtue and doing good deeds. However, modern entrepreneurs are more concerned with how to preserve and increase the value of their own wealth, and how to ensure its safety. Even if they have the awareness of inheritance, they only consider arranging the lives of their children and descendants so that they can live comfortably, but they neglect the summary and inheritance of family traditions, family culture, family style, and family precepts.”}, {
Regarding ‘to whom to pass it on,’ This is relatively easy to understand; it is generally passed on to one's own descendants. Lin Zexu wrote in his Family Instructions, “If my descendants are like me, what is the use of leaving money? If they are virtuous and wealthy, it will harm their ambition; if my descendants are not like me, what is the use of leaving money? If they are foolish and wealthy, it will only increase their faults.” From Lin Zexu's words, we can see that he believed that wealth inheritance should be based on cultivating the moral character and talent of descendants, not simply leaving behind wealth. From another perspective, it also shows that Lin Zexu had a strong awareness of wealth risk at that time, that is, leaving too much wealth to descendants is not necessarily a good thing. Modern entrepreneurs have accumulated a large amount of wealth through years of hard work; unless they donate most of their wealth to society in the form of charity, only through scientific and reasonable planning and arrangements can they be left to their descendants. This can ensure their basic living needs without burdening or harming them with wealth, reflecting the wise care of their ancestors and parents for their descendants.
Regarding ‘how to pass it on,’ The ancients had already thought about this and implemented it hundreds of years ago. During the Song Dynasty, Fan Zhongyan established the Fan Clan Benevolent Estate and established the Rules of the Benevolent Estate, using the income from farmland to support poor children in the clan with their studies, marriage, and funerals; 40% of the income was used to support clan members, and 60% was invested in education, forming a systematized charitable inheritance and achieving a sustainable cycle of ‘supporting inheritance through public welfare.’ This model lasted for more than 800 years, becoming China's earliest prototype of family trust, and the Fan Clan Benevolent Estate is also the first non-religious private charitable organization recorded in Chinese history. The ‘invisible inheritance’ of the Dongting Merchant Gang (such as the Weng family), comparable to the Huizhou merchants and Shanxi merchants, adhered to ‘low-key pragmatism and diversified investment,’ hiding their wealth in land, pawnshops, and calligraphy and painting collections, avoiding the impact of wars, and their descendants are still active in China's cultural and museum circles today. The ‘testamentary trust’ of Sheng Xuanhuai, a wealthy magnate in the late Qing Dynasty, is China's earliest case of testamentary trust. Sheng Xuanhuai established the Yu Zhai Benevolent Estate, placing half of his inheritance, a total of 5.8 million taels of silver, in the estate to be managed by a designated person, with 40% of the income going to members of the Sheng family, 40% used for charitable deeds, and 20% used by family members. The execution was ensured through legal documents, which still has research value for today's family wealth inheritance. Although insurance and family trusts, under the framework of the modern legal system, as important tools for family wealth inheritance, have only been introduced to China from abroad in the last hundred years, as early as in ancient China, our ancestors had already skillfully used wills and trusts to manage and inherit wealth, thereby ensuring the long-term prosperity and growth of their families.
Since the reform and opening up, China has developed into the world's second-largest economy, and China's private enterprises have also flourished and developed rapidly, with more wealth concentrated in the hands of individuals and families. However, cases from ancient times to the present have been warning us—‘gathering the wealth of the world will surely gather the misfortunes of the world.’ Shen Wansan, a wealthy magnate during the Yuan and Ming dynasties, ‘was rich enough to rival the country but fell because of extravagance and luxury.’ Because he flaunted his wealth, he angered Zhu Yuanzhang, his family was exiled, his property was confiscated, and he eventually died tragically in Yunnan. Hu Xueyan, a ‘red-top merchant’ in the late Qing Dynasty, accumulated enormous wealth through official-business connections, but he went bankrupt due to political suppression. Before his death, he warned his descendants, ‘Do not get close to the white tiger (silver),’ highlighting the risk of wealth being dependent on power. Shi Chong of the Western Jin Dynasty flaunted his wealth with extravagance and was ultimately annihilated due to political struggles, confirming the warning of the Book of Changes, ‘The soaring dragon has regrets’—those who are extremely rich and powerful but do not know how to restrain themselves will surely suffer disasters. Learning from history, families with enormous wealth need to be even more low-key and avoid misfortune; power can bring wealth, but it can also make wealth vanish in an instant. Modern entrepreneurs should be even more aware of potential dangers while enjoying peace, knowing when to advance and when to retreat, planning their wealth management as soon as possible, and setting up firewalls to isolate wealth risks.
When discussing governance with Fang Xuanling and Wei Zheng, Emperor Taizong of Tang Dynasty remarked, “Establishing a nation is easy, but preserving it is difficult” (from New Book of Tang, Biography of Fang Xuanling), emphasizing that inheriting a legacy is harder than creating one. The saying “wealth doesn’t last beyond three generations” can be traced back to Mencius’s “The benevolence of a gentleman is exhausted in five generations,” which cautions that wealth inheritance requires attention to the education and planning for future generations, otherwise it is easily lost. “When times change, things change; when things change, preparations must change” (from Han Feizi, Five Worms). As times change, so do things, and these changes require us to adapt our strategies. Family wealth inheritance is the same; it needs to adapt to changing times and cannot remain static or complacent. Drawing on the essence of Chinese classics and the wisdom of the ancients, and referring to the Fan Family Benevolent Estate and the testamentary trust of Sheng Xuanhuai, modern families can also, within the existing legal framework, engage in reasonable wealth management and distribution, setting up firewalls to isolate potential wealth risks, and comprehensively utilizing legal agreements, wills, insurance, family trusts, and charities to achieve orderly and scientific inheritance of family wealth.
Finally, borrowing the summary from the AI assistant DeepSeek —Inheritance is the continuation of civilization! From the philosophy of the Book of Changes, “Life is the meaning of change,” to Zhang Jian’s practice of “father’s education and mother’s industry,” Chinese civilization has long revealed that true wealth inheritance is a triple symphony of ‘material, institutional, and spiritual’ elements. When entrepreneurs build a foundation with the self-cultivation of the Great Learning, build a dike with the wisdom of Legalist institutions, and navigate with the natural laws of Taoism, they can break the curse of ‘wealth not lasting beyond three generations’ and allow wealth to become an eternal wave in the long river of civilization.
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