Family Wealth Planning – Is it time to put pen to paper

The challenges and opportunities that are faced by families with significant wealth often be unique in nature and scale.

Taking the time to think through, and stay current with, a family’s goals and needs can lead to financial security and peace of mind for generations.

Here, we offer a few questions as a framework to help ensure that you are doing all you can to make the most of your family’s finances and prepare for the future.

What services do you need to achieve your goals?

Values (as in our family values education) are relatively permanent, and something every family should articulate. However, a family’s ability to realise goals evolves as their balance sheet becomes stronger and more complex coupled with a growing family tree.

Goals also change as family members come of age or passaway, individuals’ interests shift and tax laws change.

Are you doing all you can to save on tax? 

Whatever structure you have in place, it can be a valuable exercise to have a specialist analyse where you might be more tax-efficient. For example, there may be ways to make some family office expenses tax-deductible or to reduce income tax paid by the introduction or reorganising of discretionary family trusts, bucket companies and self-managed superannuation funds.

Do you use a framework to help you plan for short- and long-term goals?

Many clients find it empowering to organise their wealth into “mental” buckets that can help them optimise the management of their resources: liquidity (cash), lifestyle (spending), legacy and perpetual growth. In this way, you can determine how much you wish to allocate to different goals.

Is your estate & succession plan in place and up-to-date? 

Everyone needs an estate plan that is updated when you experience a major life event or significant change in the value of your assets. 

Among other things, these instruments should name guardians for minor children, appoint trustees for any trusts created and designate an executor for your estate. 

Trusts are a very important and tax effective instrument for succession planning, however there are critical steps required to ensure everything goes to plan which are often overlooked.

How are you preparing for your family future? 

Whatever structures and service providers you put in place today for your family, you’ll want to consider what might happen in the future. Do you have a transition plan to cover a generational shift in stewardship of the family assets? Who are the decision makers going to be? If you own a family business, what does that look like going forward? If you have a family office, how will it work down the road?

Have you spoken with your adult children about their expectations for taking over stewardship of the family assets and legacy, and how they’re going to jointly make decisions?

We are here to help

With over 50 years of combined planning experience, the award-winning team at Provident Advisory has worked with many families over multiple generations. We can help you consider how best to meet the family many needs today, tomorrow and well into the future