Family Wealth Management

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With above-average assets, you require above-average family financial planning and wealth management.

You’ve spent your lifetime building up your wealth. It was a long and bumpy ride but you’ve made it. The next question is: How can you successfully transfer it to the next generation?

The short answer is: it’s complicated.

Your family’s wealth is always evolving. The strategies that worked this year must be adapted to next year’s intricacies. Moreover, the process looks different for every family because no two family financial situations are the same.

With higher wealth comes greater complexity and more concerns, such as:

  • Dealing with a larger, more complicated investment portfolio
  • Managing multiple properties
  • Coping with higher tax liabilities
  • Creating structures, such as trusts or foundations, to hold the family’s wealth or shares in the business
  • Planning your estate and legacy while mitigating tax
  • Keeping track of your philanthropic activities
  • Finding insurance strategies designed to help transition wealth, manage risk, and meet family wealth goals
  • Protecting your diverse range of assets from creditors (including divorcing spouses) or political instability
  • Safeguarding your assets from mismanagement upon your demise

With all these potential pitfalls, it’s no wonder that 70% of wealthy families lose their wealth by the second generation. By the third generation, that number reaches an astounding 90%.

As you map out your financial future based on both short- and long-term goals, it can feel like there are countless strategies, money-managing vehicles, budgeting, saving, spending, and investment strategies to juggle. 

So what can you do to plan for the successful intergenerational transfer of your family’s wealth?

You can tap into your Family Wealth Manager’s broad and deep expertise in investment, tax, and family wealth planning.

In order to maintain your high standard of living and sustain your family wealth across multiple generations, you need a rock-solid wealth preservation plan. By adopting the most updated tax strategies, properly forming your estate plan, and making the best use of investment vehicles, we can help you effectively manage all the details of your family wealth.

Table of Contents

The Importance of Family Wealth Management

When it comes time to evaluate the sensitive issues surrounding our finances, investments, and legacy plans, it can be difficult to make rational, objective decisions amidst the feelings of anxiety, indecisiveness, and sometimes even conflict. 

Wealth, in and of itself, is not the destination. It’s simply about having peace of mind, affirming shared aspirations and values with your family, and providing a solid future for yourself, your children, your grandchildren, and beyond. 

At Prosperity Financial Group, we offer guidance and support in navigating the complicated process of family wealth planning. We can help you define your closest-held values, ensure that your plans are thoroughly documented, and facilitate intergenerational discussions. Our holistic approach integrates the various aspects surrounding your financial legacy, including:

  • Family Wealth Planning and Management
  • Family Governance
  • College Planning
  • Estate & Trust Planning
  • Insurance Planning
  • Philanthropy and Charitable Giving

To ensure that your family wealth planning decisions are consistent with your personal values, we’ll discuss your personal opportunities and perceived risks. Then, we’ll design an effective plan to help you take advantage of these opportunities while minimizing your risks.

You can be confident in our expert advice regarding high-quality investments, an appropriate asset mix for your portfolio, navigating volatile markets, and managing the financial risks you face today and in the future.

With a Family Wealth Manager, you can have more time to spend time with the people and causes that you love most. 

Family Wealth Management Framework

The Process of Family Wealth Planning and Management

Effective family wealth planning focuses on aligning your financial desires and goals with those of your family members.

Family wealth planning is a foundational block to building family wealth now and after you’re gone. A comprehensive family wealth planning strategy goes beyond estate planning; it also focuses on equipping your heirs with the right financial knowledge, mindset, and tools to preserve and continue growing wealth in the future. Intergenerational wealth planning can be incredibly challenging, but with the right counsel, it’ll be an incredibly fruitful and rewarding pursuit.

Our goal is to ensure that you remain financially independent while managing the complex tax, legal, and financial planning concerns of intergenerational wealth transfer:

  • Managing sizeable family expenses, like college tuition and weddings
  • Making sure each generation has sound and tax-efficient financial life plans
  • Educating your family members about their options and opportunities
  • Managing the transition of the family business
  • Providing for the financial aspects of your long-term care needs
  • Ensuring asset protection through a rigorous risk management process
  • Helping you make the better choice between lifetime giving (i.e., gifting while you’re still alive) versus leaving an inheritance
  • Fulfilling your wishes of whether to set up trusts for your heirs
  • Finding tax-savvy ways to make your charitable giving go further
  • Implementing strategies to shield your estate from the estate tax

Why You Should Start Planning Now

No matter your income level, it’s wise to take a proactive approach in building your family wealth planning strategy. As your family and estate grow, it becomes increasingly challenging to build an all-encompassing plan.

If you’re looking for a good starting point, begin by articulating what financial success looks like for you and your family. What are your family members’ financial aspirations? What is the likelihood that they’ll be able to take an active future role in managing family members and finances? These are the foundational pieces that will set the direction for your family wealth planning strategy.

It may be worth your while to work closely with a Fiduciary Wealth Manager when planning for your family’s financial future. Not only is family wealth planning a manually complex endeavor—conversations about money are notoriously difficult. Having an unbiased third-party advisor can help mitigate the emotional tension that usually accompanies wealth planning conversations.

Family Governance

Family governance helps family wealth survive generation after generation. To future-proof your wealth, you need a clear plan for sustaining family unity as well as prosperity. 

Without such a framework, wealth is at risk of dissipating. Family disputes or poor investment decisions can wipe out decades, or even generations of wealth-building. The process of transferring wealth between generations can be plagued with trust issues and lack of communication. “78% of high net worth individuals feel that their heirs aren’t financially responsible enough to handle inheritance,” says Chris Heilmann, U.S. Trust’s chief fiduciary executive. 

It’s easy to understand why families would avoid the dreaded money talk. In fact, 64% of high net worth individuals admitted that they’ve disclosed “little to nothing” about their wealth to their children. The reasons are endless.

  • You may have been taught not to talk about money.
  • You may worry that your children will become lazy and entitled.
  • You may fear that loose lips sink ships!

Harrowing as it may seem, there is a way to navigate the conversation smoothly. The idea is to turn an honest discussion into a concrete plan—one that includes expectations from both the current and next generation, as well as how to carry your family values forward.

Family governance can be a powerful tool to pass on the most important values— a strong work ethic, financial discipline and skills, a commitment to family harmony, and an emphasis on education—at the heart of your family’s success.

At Prosperity Financial Group, we focus on unifying generations around commonalities—core values, goals, traditions, legacy—and empowering each generation to interpret, innovate, and contribute in their own way. We aim to help strengthen your family’s unity through philanthropy, impact investing, and shared passions.

A Fiduciary Wealth Manager can help you facilitate a productive discussion with your family members about the resources that’ll someday be available to the children, and about the responsibilities that come with substantial wealth.

When implementing your family wealth plan, it’s important that each generation is involved in establishing and agreeing to ground rules regarding:

  • Control and decision-making over the long term
  • Conflict mediation and resolution
  • Responsible management of an allowance
  • Entitlement to shares in the family business
  • Business succession
  • The role of family members vs. non-family members in the business
  • Philanthropic goals
  • The succession of the family’s core values

Finally, we recognize that your family’s wealth is ever-evolving. Your financial needs and goals can and will change. As such, we integrate periodic reflection and revisions throughout your family wealth management journey.

College Planning (529 Plans)

If you have young children or grandchildren, you might have noticed rapid increases in college tuition and fees. In fact, if college costs keep rising as they have for the past 30 years, the inflation-adjusted price of a four-year undergraduate education could more than double by the time your children or grandchildren are ready for college.

It’s more important than ever to start saving for your children’s and grandchildren’s college education as soon as possible. The sooner you start saving, the better position you’ll be in to meet college costs.

Your ideal savings vehicle is one that:

  • Isn’t saddled with arbitrary income limits on eligibility
  • Allows you to contribute a little or a lot, depending on your current cash flow situation
  • Lets you set up automatic recurring contributions from your checking account so you can put your savings effort on autopilot
  • Gives you a way to stay ahead of college inflation
  • Some tax benefits so as many of your dollars go towards your heirs’ education, and not Uncle Sam

You can find all of these things in a 529 Plan. Here are some of the key features:

  • Eligibility. Unlike Coverdell accounts, U.S. savings bonds, and Roth IRAs, you can contribute to a 529 plan no matter your income level.
  • Ease of opening and managing your account. It’s an easy process to open a 529 account, set up automatic monthly contributions, and manage your account online. You can modify the amount and frequency of your contributions, change the beneficiary, change your investment options, and track your investment progress online.
  • Contributions. 529 plans have high lifetime contribution limits. The exact limit depends on each individual state, and generally begin at $350,000 and up. You can take advantage of a unique gifting feature that allows lump-sum gifts up to five times the annual gift tax exclusion. In 2020, this amount is up to $75,000 for individual gifts and $150,000 for joint gifts. This is a useful estate planning tool for grandparents who’d like to contribute to their grandchildren’s college education in a tax-efficient manner.
  • Tax benefits. The biggest benefit of a 529 plan is the unsurpassed income tax breaks. Earnings grow tax-free at the federal level. When the money is taken out to pay for tuition, fees, room, board, books, and a computer, every dollar is available for college. In addition to the federal tax savings, over 30 states currently offer a full or partial tax deduction or credit for 529 plan contributions.

Estate Planning

Estate planning is associated with irrevocable trusts, life insurance, and lifetime gifts in order to most efficiently protect and transition your wealth to the next generation.

However, minimizing taxes shouldn’t be the ultimate goal of estate planning. A successful estate plan fulfills specific client wishes, even if they result in less tax-efficient planning.

As such, estate planning is the process of creating a master plan for managing family wealth after you’ve passed on. You get to decide how, when, and to whom assets will be distributed—ideally at the lowest possible cost.

Our process of creating a precise and comprehensive estate plan includes the following common issues:

  • Minimizing taxes, court costs, and unnecessary legal fees
  • Asset protection
  • Charitable giving
  • Safeguarding financial security for family and friends
  • Naming a guardian and an inheritance manager for minor children
  • Planning for children of a previous marriage
  • Organizing inheritances in a fair and equitable manner
  • Retiring from a family business
  • Including life insurance to provide for your family upon your passing

Many individuals put off estate planning because they don’t think that they own enough, they’re not old enough, they’re busy and think there is plenty of time, they’re confused and don’t know how to find help, or they simply don’t want to think about it. 

In fact, good estate planning often means more to families with modest assets, because they can afford to lose the least. And unfortunately, we can’t successfully predict how long we’ll live. Illness and accidents happen to people of all ages. Then, when something happens, your family will have to pick up the pieces during their most vulnerable time.

Don’t make the mistake of missing out on opportunities that come with more sophisticated strategies. For instance, even if you’ve already designated beneficiaries on your financial accounts, having an estate plan that utilizes trusts can help to ensure that your assets are distributed tax-efficiently, without unnecessary delays and according to your wishes. 

It’s a good idea to use the full range of estate planning tools. Begin with creating a will and establishing a trust; naming a durable power of attorney to make financial decisions if you become incapacitated; and choosing a healthcare proxy to guide medical care, if necessary. You may also want to work with a Fiduciary Wealth Advisor who can help ensure that the process is as streamlined as possible for your loved ones after you’re gone.

At Prosperity Financial Group, we can help you assess your estate tax liability, incorporate tax-efficient trusts into your wealth management plan, determine your most important goals, and structure a plan that fits your needs. We’ll review your estate plan regularly to make sure it still aligns with your goals.

Your Wealth Manager will ask you questions to evaluate whether your estate plan is in line with your wishes:

  • How do you want your wealth to benefit your children, grandchildren, or community? What concerns do you have? 
  • Do you have a special asset (e.g., a business, a home) that your family should retain? How will that be done?
  • Are you currently helping family members to reach their goals (e.g., buy a home, start a business, etc.)? Have you made loans to them? If so, should the loans be forgiven at your death?
  • Are you concerned about the negative effects of wealth on future generations? Have you considered incentives to encourage hard work, entrepreneurship, philanthropy, and church and social work?
  • Tell me about your life insurance policies. Why did you purchase them? What would you like the death benefits to do for your family? If you had to change anything, what would it be?
  • Is creditor protection an issue for you?
  • What do you want for your spouse after your death? Do you foresee any conflict between your spouse and your children?
  • Does each of your children have equal resources to provide for your grandchildren? Do you plan to help with the education of your grandchildren?
  • When will you step down as head of your business? Do you have a target retirement date? How much of the ownership will you relinquish at retirement?
  • Do you have a formal buy-sell agreement? Is it funded?
  • How will you tap into the business to pay out retirement income? What if your successors bankrupt the business?
  • What assets will the estate liquidate to pay estate taxes?
  • How will the estate taxes and other costs be paid? From what assets?
  • Does your family understand how IRAs are taxed when inherited and what options are available for deferring those taxes? Under the SECURE Act, anyone who does not qualify as an eligible designated beneficiary (e.g., a surviving spouse, a minor child) has to deplete the inherited account by the end of the 10th year. Has your family accounted for the tax impact of those distributions, which may be taken as a one time hit or spread over a period of years?
  • How prepared is your family to receive your wealth after your death?
  • Have you explained your estate plan to your family? If not, why not?
  • Have you given your executor and trustees separate letters of instruction to provide guidance for managing your wealth?

Family Trusts

An estate plan begins with a living trust. A trust is a versatile wealth management tool allowing you to transfer the legal ownership and management of your assets to a designated trustee. As such, a trust doesn’t die with you; assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit. 

The ultimate goal of a trust is to protect hard-earned wealth in order to help secure a family legacy.

Having a trust allows you to:

  • Avoid probate at death
  • Bring all your assets (even those with beneficiary designations) together in one plan
  • Protect your legacy from creditors, spouses, and irresponsible spending
  • Provide maximum privacy
  • Manage complex family wealth scenarios
  • Avoid court interference at incapacity and death

A trust can be designed to ensure that trust funds are distributed according to your wishes so that you can create the legacy for which you’d like to be remembered. Moreover, there are a variety of trust strategies available to help you save for retirement while maximizing tax advantages. A family trust helps to provide continuity, preserve capital, and help your family enjoy peace of mind and financial benefits across generations.

The best benefit of a trust is having peace of mind. For this reason, it’s essential to have a trustee with financial expertise. Trusts involve complex management, as well as challenging financial and investment decisions. A Family Wealth Advisor can provide the critical guidance that you need in your estate planning and documentation process. A properly prepared estate plan is one of the most thoughtful and considerate things you can do for yourself and for your loved ones.

Life Insurance

Regardless of your age or current stage of life, life insurance should be part of a comprehensive family wealth management strategy. In addition to providing financial protection against untimely death, insurance can be leveraged to provide tax-efficient strategies for your family and for retirement.

Life insurance policies can efficiently maximize the distribution of assets to your spouse, your kids, and your favorites charities. Policies aren’t counted as part of an estate. The proceeds of life insurance are tax-free to the beneficiary.

When structured properly, whole life insurance can offer steady tax-free dividends. Depending on the type of insurance, it may also have a cash value. The cash value in the policy builds up and can be used as your own private bank for a variety of income-producing activities.

Philanthropy Management

When you’ve accumulated significant wealth, you may decide that you want to leave a legacy to impact the world in a way that promotes your personal values. It can be enormously fulfilling to give back to your local community, make a social impact, or show your gratitude to a hospital that cared for a loved one. It’s also a powerful financial tool to benefit your overall family wealth management goals.


To define your legacy, start with 3 foundational questions:

  1. What drives you?
    Think about what motivates you to act in order to make a difference. It could be a passion that you’ve had since childhood or something you’ve become more aware of in recent years and want to support. Perhaps it’s related to your lifelong career. Maybe you noticed it when watching a relative or friend suffer through a health condition.

  2. Who do you want to help?
    To have the maximum impact, it’s best to identify a specific audience and focus your efforts toward reaching that group. Some groups of people who could benefit from your philanthropy include alumni, inner-city youth, or crime victims.

  3. What’s your end goal?
    Do you want to help children in underserved communities access education opportunities? Do you dream of bringing clean water to a remote village in an international country?

In addition to helping your chosen community, charitable giving is also a way to educate younger generations about your family’s wealth journey. For instance, you can involve your children in choosing the charities that you give to on an annual basis; this empowers them to communicate their own values and put them into action.

Once you’ve defined the legacy you want to leave, it’s time to shift your attention on the steps you can take to get the most out of your charitable gifts. We can implement a plan that can benefit your overall wealth strategy in the following areas:

  • Income taxes. You may receive an income tax deduction. The federal gift tax doesn’t apply to charitable gifts.
  • Estate planning. You can reduce your taxable estate and leave your loved ones with a more substantial legacy.
  • Investment portfolio. Capital gains tax isn’t levied on publicly listed securities, and the receipt of your charitable donation depicts the current market value of the securities that you’ve donated.
  • Annual income. Certain strategies may produce income that exceeds previous income flows.

If you want to create a lasting philanthropic legacy, we can help you make charitable giving an important part of your family legacy as well as your wealth management plan.

Our Family Wealth Management services help you maintain a balance between sustaining your lifestyle and leaving a legacy.

Your wealth isn’t measured purely by its monetary value. It also reflects the influence that it can have in your lifetime—in the legacy you leave behind, in the lessons taught to those closest to you, and even in the lasting social impact generated by your philanthropy. 

At Prosperity Financial Group, we understand that If It’s Money, It’s Personal™. We recognize that you need an open, trusting, and transparent relationship with your Fiduciary Wealth Manager. We’ll work with your multi-generational family to address the complex issues of successful wealth transfer.

Our clients understand that successful family financial planning is too complex and important to be done independently and understand the value of having expert guidance. By meeting frequently, your Wealth Manager is uniquely qualified to recognize and react to changes in your life that can have an impact—positive or negative—on your family wealth management plan.

Our job is to converge your values with our resources and expertise in order to achieve your most important financial and personal goals. We’ll work with you to pass along the family assets in a harmonious way while also reducing taxes.

Your family deserves to create a financial legacy with a Wealth Management firm that is committed to your continued success, generation after generation. We can help you simplify complexities, develop strategies to help you meet your unique goals, and guide you toward making informed decisions about how to manage your family’s wealth.

Our Wealth Advisors are committed to providing thoughtful, evidence-driven advice on a range of financial products for you and your family. To help you maximize your financial growth potential, we will:

  • Create a comprehensive investment management plan
  • Help you take advantage of tax-efficient strategies to maximize your financial growth potential
  • Provide fiduciary advice for tax-advantaged college planning
  • Develop an estate plan that incorporates your needs and objectives, including an in-depth consideration of tax implications for present and future generations
  • Recommend a life insurance policy that’s designed to ensure that you, your family, and your investments are covered
  • Structure your philanthropic efforts so it has the maximum positive impact on the causes that you support

If you would like to learn how you can effectively preserve, protect, and grow your family’s wealth for generations to come, please fill out the form below and we’ll get back to you shortly. We look forward to hearing from you. 

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DISCLAIMER: Advisory Services offered through Prosperity Financial Group, Inc., an Independent Registered Investment Advisor. Securities offered through Fortune Financial Services, Inc. Member FINRA/SIPC. Prosperity Financial Group, Inc. and Fortune Financial Services, Inc. are separate entities.

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