Diagram of good practice

Multi-Generational Family

  • Represented by wealth generator or surviving spouse
  • Elderly parent(s) of wealth generator or spouse
  • Married adult children with several children of their own
  • Second marriages/families are common
  • Stay-Awake Issues/Needs/Goals/Worries/Services
    • Estate Planning
    • Who will manage when originator is unavailable [lie awake issue]?
    • How is it fair to various beneficiary levels when unequal distributions are needed?
    • Maximize what stays in the family, versus the government in taxes
    • Establish a framework for the family to continue to thrive in future generations
    • Education programs for family members
    • Investments
    • Philanthropy
    • Family Governance
    • Dynastic planning with trusts, insurance policies or other assets
  • Varying administrative cash/custody services over time
    • Differing levels of need during maturing/aging process on either end of the age continuum
    • From a la carte to turnkey cash management services
  • Personalized, tailored and comprehensive family office services meeting needs of the various generations
    • The expertise, attention and convenience of a single-family office, without the expense
    • Shared priorities and opportunities with other similarly situated high-net-worth families
    • It is difficult to justify the expenses of a single-family office for family assets not in the tens-of-millions range. A multi-family office is a reasonably priced, fully equipped, alternative.

Family Owned Business

  • In addition to common issues with the multi-generational relationship above, the family still actively running the family (wealth generating) business, must address other concerns when awake at night.
  • Business Issues
    • The wealth originator is still committed to management of the business, no liquidating event has occurred
    • The family’s “personal” business is deeply intertwined with the family’s “business” business
    • Stay-Awake Issues result because while the family business employs accountants and bookkeepers, what involvement should these paid staff members have with the “personal” side of the family business?
      • The overlap of personal and business family issues can always be puzzling and sometimes be vexing.
      • The family may not want the business staff to be deeply involved with their personal business. They are being paid to perform a different task for the operating business that may not be applicable to the personal issues.
      • Often a wall develops between the two sides of the family business and inefficiencies result.
  • Tax/Financial Issues
    • The needs of the “business” side are clearly different from the needs of the “personal” side of the family business
    • The areas of expertise needed for the two sides are different. An expert in real estate leasing may not be an expert in estate planning
    • The financial/investing needs of the two sides are clearly different. Whatever the family business might be, it is not likely to be management of multi-generational financial assets for the disparate family members.

Young Entrepreneurs

  • Different demographic from the more senior wealth generator atop our multi-generational family
    • Still actively generating wealth through development and sale of businesses
    • Intermittent liquidity events
    • Some liquidity from employment, but salary not primary wealth generator
    • Maintains debt secured by liquid assets for personal and business uses
  • More interested in participating in investment process, but may desire to offload cash administration
  • Stay-Awake Issues arise because they are more susceptible to short term economic anomalies due to being actively engaged in wealth generation and diversification
  • Needs support with diversely located investments and assets
  • Earlier stage estate planning and tax issues. Still in high-earning period

Foundations and Endowments

  • Our individual HNW clients become involved in philanthropic endeavors either through —
    • Establishing their own private foundation; or
    • Joining the board of a public community foundation or endowment
  • These public charity boards are constituted in large part of HNW individuals who are members of our client groups above, so they share common Stay-Awake Issues above
  • The investment management style required for a non-profit foundation or endowment is very similar to that of a multi-generational family