Family Wealth Management

Aug 20, 2020

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 wealth to the next generation?

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

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

With all these potential pitfalls, it’s no wonder that 7 in 10 wealthy families lose their wealth by the second generation. By the third generation, that number reaches an astounding 9 in 10 families.

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 Advisor’s broad and deep expertise in investment, tax, and family wealth planning.

You need a rock-solid wealth management & preservation plan to maintain your high standard of living and sustain your family wealth across multiple generations. 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.

The Importance of Family Wealth Management

The Prosperity Difference

Fiduciary wealth management

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

This is where your Fiduciary Wealth Advisor comes in. Learn more our Fiduciary duty of loyalty.

A high-level overview of our family wealth planning process

Our top priority is making sure your family wealth planning decisions are consistent with your personal values — every step of the way.


We’ll discuss your closest-held values, financial opportunities, ensure that your plans are thoroughly documented, and facilitate intergenerational discussions. 


We’ll design an effective plan to help you take advantage of these opportunities while minimizing your risks.


Receive 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.

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.

Intergenerational Wealth Transfer
Protecting & preserving your family legacy

We can help you manage the complex financial, legal, and tax planning concerns of intergenerational wealth transfer:

  • Managing sizeable family expenses, including college tuition and weddings
  • Building sound and tax-efficient wealth plans for each generation
  • Educating your family members about their financial options and opportunities
  • Managing the transition of the family business to successors
  • Planning for long-term care needs for you and your spouse
  • Ensuring asset protection through a rigorous risk management process
  • Helping you make the tough estate planning decisions, and weighing lifetime giving (i.e., gifting while you’re still alive) versus leaving an inheritance
  • Helping you set up protective trusts for your heirs
  • Increasing the impact of your charitable giving through creative tax and gifting strategies
  • Implementing strategies to shield your estate from the federal government

Why it’s important to 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.

Start by articulating what financial success looks like for you and your family. 


  • What are your biggest financial goals?
  • 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.

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The Prosperity Advantage

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 family wealth planning conversations.

Schedule your complimentary strategy session with me today.

Elliot Kallen headshot

Elliot Kallen

Registered Principal, Prosperity Financial Group

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. 

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

The risk of poor governance

Without such a framework, wealth is at risk of dissipating. Family disputes or ill-advised investment decisions can wipe out decades, or even generations of wealth-building.

However, the process of transferring wealth between generations can be plagued with trust issues and lack of communication. “78 percent 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. According to the same survey, 64 percent of high net worth individuals admitted that they’ve disclosed “little to nothing” about their wealth to their children.

Why? 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.

Have a productive conversation about money

It’s possible to achieve family harmony through philanthropy, impact investing, and shared passions.

We focus on unifying parents and children around commonalities — core values, goals, traditions, legacy — and empowering each generation to interpret, innovate, and contribute in their own way. 

start the conversation today!

A Fiduciary Wealth Advisor 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.


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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 key features:

Anyone can open a 529. 

Unlike Coverdell accounts, U.S. savings bonds, and Roth IRAs, you can contribute to a 529 plan no matter your income level.

It’s easy to manage.

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.

High contribution limits. 

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. 

Over 30 states currently offer a full or partial tax deduction or credit for 529 plan contributions. While contributions to California’s plan are not deductible at the state or federal level, all investment growth is free from state and federal taxes, and the earnings portion of withdrawals for qualified education expenses are income tax-free.

Estate Planning

Estate planning is the process of creating a master plan for managing family wealth after you’ve passed on. We use tools — like irrevocable trusts, life insurance, and lifetime gifts — in order to protect your wealth for the next generation.

Tax minimization is not the sole goal of estate planning, though. A successful estate plan fulfills your unique wishes, even if they result in less tax-efficient planning. You get to decide how, when, and to whom assets will be distributed—ideally at the lowest possible cost.

Here’s a list of common issues that may be covered by your estate plan:

  • 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

Did you know?

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.

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 miss out on opportunities that come with more sophisticated strategies! For instance, even if you’ve already designated beneficiaries on your financial accounts, you still need an estate plan that utilizes trusts. This ensures that your assets are distributed tax-efficiently, according to your wishes, and without unnecessary delays. 

How to begin your estate plan

Your Fiduciary Wealth Advisor will guide you in using 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. Your Fiduciary Wealth Advisor who can help ensure that the process is as streamlined as possible for your loved ones after you’re gone.

If you left the world tomorrow, what would happen to your estate?

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 also review your estate plan regularly to make sure it still aligns with your goals.

Get in touch today to start the conversation!

Evaluating Your Estate Plan

questions to consider

  • 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.

A trust lives beyond your lifetime; 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

The best benefit of starting a trust is 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. Your 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.

Ensure a lasting legacy

Your estate plan can help you define how you want your wealth to benefit the people and causes you love.

Get in touch today to start the conversation!

Life Insurance

Regardless of your age or current stage of life, life insurance should be part of a comprehensive family wealth management strategy. 

One of the benefits of owning life insurance is the federal income-tax-free benefit payable to your beneficiaries upon your death. However, while the proceeds are income-tax-free, they may still be included as part of your taxable estate for estate tax purposes. Your Fiduciary Wealth Advisor can help you develop a strategy to remove life insurance proceeds from your taxable estate.

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

After accumulating significant wealth, you may decide that you want to leave a lasting philanthropic legacy. It can be enormously fulfilling to give back to your local community, make a social impact, or show your appreciation to a hospital that cared for a loved one. It’s also a tool in your overall family wealth management strategy.

Defining Your Legacy

How do you want to be remembered for what you have contributed to the world? Here are 3 foundational questions for defining your legacy.

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.

Who do you want to help? 

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.

What’s your end goal? 

Consider the specific lasting impact you’d like to make. 

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?

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.

We Can Help

Your wealth isn’t measured purely by its monetary value!

It also reflects the level of influence you can enjoy 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. 

A strong Family Wealth Management plan helps you balance maintaining your lifestyle and leaving a legacy.

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 Advisor. 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 thus understand the value of having expert guidance. 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.

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


We’ll spend 30 minutes getting to know you—your situation, needs, and vision—then offer a strategic plan to reach your goals.
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