At Boutique Advisers Private Wealth, we work closely with families around “The Great Wealth Transfer” that is expected to see an estimated $224 billion transfer through inheritances in the next 25 years. Recent research from Generation Life and Core Data advises that whilst 80% of high-net-worth individuals wish to leave a legacy, just one in five has made a formal plan.
Although many clients come to us to assist them with their Wealth Management, as part of our broad discussions we like to uncover and understand what their plans are not just for today but for the next generation. Some of the top considerations we discuss with our clients, and we feel should be part of the Wealth management journey include,
Starting the conversation early
Through our client journey we talk to clients about their Financial Goals and their Purpose and Legacy needs. Talking about Legacy is not just for the ultra-wealthy and can have just as much of an impact on the family wealth with clients that have accumulated moderate wealth over their life. Legacy is not just about Wills and Estate plans; it is about family and investments and how we can protect what has been built for those who will receive the inheritances in the future. Sometimes this includes passing of assets early to assist with kids and grand kids’ education, assistance with debt planning and sometimes to help family have a better life.
Understand the family privacy
Quite often at the core of some estate plans is the need and wishes to keep the family financial affairs private. For most of our clients the use of Family Trusts and Family Investment Vehicles allows control to change without going through the actual estate. This allows the simple probate to only divulge the personal assets being held, which generally revolve around cash, cars and home property. Every family is different so it’s important to understand the individual legacy needs of that family.
Are we missing a generation?
This is quite rare in completely missing a generation, however in some cases a higher proportion of provisions are made for future generations rather than the immediate. This generally revolves around families that have chosen to pass the baton early and the first generation are set up and have already benefited in advance financially. The risk of leaving all assets to the first generation can sometimes be a serious consideration as many strive to ensure the family assets only follow blood lines, and with the high level of family marital splits, the focus has changed.
What are some of the tax impacts?
Tax impacts including estate taxes, capital gains tax and income tax on beneficiaries is always a hot discussion point. The use of three generation testamentary trusts within wills, the pathway of dependant versus non-dependant beneficiaries within the superannuation arena and the resurgence of Superannuation Testamentary Trusts within Wills are fascinating discussions. It can sometimes be just some small changes that can save, in some cases, millions of dollars in tax. It is just a case of understanding the landscape, how it impacts the family and ensuring that there is alignment of estate wishes and control.
Existing family conflicts that might “undo” all the good work
I mentioned earlier around the blood lines and how important this is to some families when we start talking about family wealth. Family conflicts can be attached to marital issues, but quite often it can be siblings that may not agree on a certain pathway. We have always found having the discussion upfront so the air is cleared can assist in understanding the methodology or the thoughts that may have been going through the family’s mind when the plans were created. Quite often legal action can be avoided when it comes to estates just by addressing the issues early and having family meetings as part of the family legacy planning.
At Boutique Advisers Private Wealth, helping families on this Wealth Management journey is something we take very seriously. To have a confidential chat about your position please call our team 08 9381 8779 or contact us here.
Gary Hasler is the Managing Director of Boutique Advisers and works with highly successful individuals and families, providing strategic financial advice. Gary specialises in working with generational family businesses, executives and family office clients as well as high level professional athletes. Gary is passionate about working with Boutique clients in a collaborative way, providing clarity and confidence, and helping them navigate their financial life.