Preserving family wealth for future generations


The desire for economic stability and even wealth creation for your family’s future generations is a common human aspiration. In these troubling times, it is no small challenge to protect the wealth that you’ve worked so hard to build. Your family will want the money to be available when it is needed—especially in unprecedented times—and to be passed on to future generations.
Amassed wealth can label you into categories such as ‘high-net worth’ or ‘ultra-high net worth’ in the minds of marketers and bankers, who constantly bombard you with bespoke solutions and lofty guarantees on how they can ensure you stay rich. It is recommended that you turn only to reliable and established wealth managers, who come with a legacy in delivering the services they promise to deliver and have their securities and risk mitigation plans well planned out.

Here are some financial tips on preserving family wealth from Christina Worley, CPA/PFS, CFP®, CFA, the Founder and Managing Member of Castle Wealth Management, a South Florida financial planning firm that specializes in high net-worth clients from around the world.

Define ownership rights
Distributing the ownership rights of your assets between family members can be a great way to insulate yourself from losing everything. Assets that are under the names of family members, other than you, are protected in such a scenario. Assign nominees diligently, keeping in mind the vested interests of the parties and the situations that could arise should you the owner pass away suddenly. While many families may feel that this decision is one of the easiest, legal counsel is always recommended. Some states allow for an ownership type called ‘tenants-by-the-entirety’, which automatically assigns assets to the spouse of an expired owner.

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Insure as much as you can
It may sound like an age-old cliché, but insurance really does show up in the most difficult of times. Today, there is a wide range of insurance products that protect you from various eventualities, be it natural calamities, theft, cyber fraud, and in some cases, even legal battles. Life insurance can also soften the blow your heirs may suffer when a loved one passes, taking the stress out of financial responsibility.

Separate personal and business assets
Legal disputes have been known to drain many people of their business holdings as well as their family homes and possessions. It is important to keep your personal belongings insulated from threats that could face your business and vice versa. This helps reduce the burden of losing your entire livelihood, should a legal battle ensue in the future.

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Set up a trust
Creating a dynasty irrevocable trust is a great way to reduce the tax burden that your heirs could inadvertently inherit along with your wealth. Trusts protect your wealth from creditors like no other instrument can. However, it is important to note that domestic asset protection trusts aren’t prevalent in all states. Many claim that these trusts are among the strongest wealth protection defenses that you could set up. An estate planning attorney can help you determine the type of trust that would work best for your situation.

Use tax-efficient investment strategies
Working with an investment advisor who employs tax-efficient strategies and who coordinates with your tax professional is the best way to ensure that you will keep more of the assets you grow. Some basic strategies include smart asset location, ongoing tax loss harvesting, managing your income tax brackets, strategic disbursement of trust assets, and utilizing tax-efficient exchange-traded funds.