Building a comfortable life for the ones you love takes years of hard work, dedication, and sacrifice. For many people, the goal is to obtain financial freedom while keeping a lasting legacy for future generations to come. However, keeping family wealth in the family does not happen by accident, it takes careful planning and guidance from a team of specialized professionals to help you preserve, grow and pass on your wealth.
Understanding What it Mean to “Keep Family Wealth in the Family”
“Keeping family wealth in the family” refers to strategies and practices aimed at preserving and transferring wealth within a family across generations. This concept has various financial planning techniques, such as:
- Estate Planning: Structuring wills, trusts, and other legal documents to ensure assets are passed on to heirs with minimal tax implications.
- Gifting: Giving money or assets to family members during one’s lifetime to reduce the taxable estate.
- Investing in Family Businesses: Encouraging the growth and continuity of family-owned businesses as a means of maintaining and building wealth within the family.
- Creating Family Foundations or Trusts: Establishing entities that can hold and manage family assets for future generations, often with specific goals like education or charitable giving.
- Succession Planning: Preparing and implementing a plan for passing leadership roles in family businesses to the next generation.
The ultimate goal is to ensure that the family’s wealth continues to benefit future generations, maintaining or growing its value over time.
Don’t wait. Now is the time to prepare to get the most out of your lifetime of hard work – for you and your family.
5 Effective Tips for Family Wealth Planning
1. Mentor future generations in your family.
Keeping family wealth going for generations takes work. We are not born with skills, but rather skills are learned. Handling money properly is a skill. Take the time to educate future generations about managing finances and saving money. Explain the importance of earning money and the value it brings. Family wealth planning goes beyond having money in the bank, it’s about values and principles.
2. Preserve, grow, and take income.
Once you have accumulated a significant amount of wealth you can prepare to preserve it, grow it, take income from it, and of course – pass it on to your heirs. There are many things to consider when it comes to managing your family wealth, which is why you should consider advice from a professional. A financial advisor will be able to prepare a cash flow analysis, create a financial plan, help you navigate taxes, and manage investments – so you can get the most out of your money.
3. Create a direction for distribution.
It is imperative to create a distribution plan for your family wealth. Not having a plan outlined in an Estate, will, and/or trust will likely cost your family time, money, and many headaches. Make sure you have a clear plan for distribution. This will help you avoid any unintended beneficiaries and create a smoother transition of wealth to your heirs.
4. Communication is Key!
Talking about money with family can be uncomfortable, however, it is necessary. Discuss your assets, estate, financial changes, wills and trusts, and any other important finance related items. Explain the logistics behind your family wealth plans and go into detail about the vision you have for future generations. Communication allows for clarity within the family and gives a better outlook on where your family is headed.
5. Trust the Professionals.
This can be a confusing and overwhelming task for you and your family. You want to honor the generations that came before you while growing the wealth for generations that come after you. A financial advisor can help you with your questions, concerns, planning, and management of your wealth. It is important to discuss what your family has, how it can be maintained, and the opportunities for the wealth to grow and prosper. This is where our team of experienced fiduciary Financial Advisors can help. Our advisors will create a customized plan to help you RETIRE WELL. Schedule your complimentary retirement review with us today!
Start Family Wealth Planning Now
As we mentioned before, keeping family wealth in the family does not happen by accident. It takes careful planning and guidance. These are just a few tips to get you started. To learn more about what you can do to keep family wealth in the family, give our office a call today at 262-522-4040 or contact us here.
Any opinions are those of Kowal Investment Group. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Kowal Investment Group, LLC (“Kowal”) is a Registered Investment Advisor (“RIA”). Kowal provides investment advisory and related services for clients in State of Wisconsin and other states. Kowal will maintain all applicable registration and licenses as required by the various states in which Kowal conducts business, as applicable. Kowal renders individualized responses to persons in a particular state only after complying with all regulatory requirements, or pursuant to an applicable state exemption or exclusion.
