Baker Tilly’s private wealth leaders Duncan Campbell and Ed Drake were joined by Dr. Lee Hausner, an internationally recognized clinical psychologist, family wealth/family business advisor, frequent keynote speaker and co-founder of a nationally recognized consulting group, for an interactive discussion on family wealth planning.
Throughout the discussion, Duncan, Ed and Lee provide unique perspectives while answering key wealth planning questions, including:
Families should start by writing a mission statement: Where do you see your family in 50 years? Then, they should identify the strategic behavior/plan needed to develop independence and be self-reliant. The next generation isn’t earning the money, but they need to be aware of how to manage and invest it.
A mission statement should be met with an understanding of the values you want to pass down from generation to generation; goals need to be defined at the family level. Then, each individual can develop an intentional coaching plan.
Ed Drake and Dr. Lee Hausner agree that it is never too early to start; the earlier, the better. Children need to be exposed to conversations regarding costs, budgeting, etc. so they can develop the right skills to help make future decisions collaboratively.
Honesty, integrity and perseverance. Dr. Hausner said, “when the going gets tough, you don’t go shopping.” Other important attributes include intellectual curiosity, effective communication skills and stewardship. The next generation is responsible for passing on your family values, but parents are responsible for training their children to understand the foundation/history of their wealth and showing the next generation how to be philanthropic.
The following table shows the “basket” for wealth allocation; most families will allocate their wealth to these nine areas.
The “launching pad” above refers to the time when your children have finished their education and are venturing out into the world of “work.” For the first few years, you may want to provide financial support while they get their careers going, such as rent, etc.
But, what do you do with the leftover wealth? Most families have four accounts. In Dr. Hausner’s book, she refers to the “four capitals” or accounts of the legacy family as FISH: financial, intellectual, social and human. The following table and shows the four long-term trusts that support the FISH: family bank supports financial capital; education supports intellectual capital; foundation supports social capital; and legacy supports human capital.
Every family should have a plan. Every parent wants their children to grow up to be productive and conservative. An intentional structure or plan will help any family and if they have that game plan, with their priorities in place or their FISH, then they can execute. Families with billions will face different issues, such as how much to pass down to each child, etc., but every family needs to plan for the future.
For more information or to learn how Baker Tilly specialists can help, reach out to your Baker Tilly professional or contact our team.
Join Baker Tilly’s private wealth leaders Duncan Campbell and Ed Drake for casual conversations featuring private wealth professionals. Don’t miss the next event!
Baker Tilly Wealth Management, LLC (BTWM) is a registered investment advisor. BTWM does not provide tax or legal advice. BTWM is not an attorney. Estate planning can involve a complex web of tax rules and regulations. Consider consulting a tax or legal professional about your particular circumstances before implementing any tax or legal strategy. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Securities, when offered, and transaction advisory services are offered through Baker Tilly Capital, LLC, Member FINRA and SIPC; Office of Supervisory Jurisdiction located at 4807 Innovate Ln., Madison, WI 53718; phone: +1 (800) 362 7301. Baker Tilly Wealth Management, LLC and Baker Tilly Capital, LLC are wholly owned subsidiaries of Baker Tilly US, LLP. Baker Tilly US, LLP, is an independently owned and managed member of Baker Tilly International. © 2021 Baker Tilly Wealth Management, LLC