5 Steps for Successful Family Wealth Management

April 20, 2023

Angella N. O’Hara, ChFC®, FPQP™, Advisor/Operations Manager

Most families want to avoid the horror stories of heirs fighting over their inheritance, or of having to give up a large portion of their inheritance to the taxing authorities. The good news is that proper family wealth management can help prevent those scenarios. 

Davie Kaplan’s professional wealth managers can help manage your family’s wealth successfully, avoiding large estate tax bills and court battles over an inheritance. Start with these five steps to make sure your wealth is managed well for your family today and into the future. 

1. Conduct regular reviews with a team of professionals. 

Managing family wealth for the present and for the generations requires the help of more than just one professional. Your wealth management team should include a team approach, and members of the team might include a Certified Public Accountant, Certified Financial Planner™, estate planning attorney and others. 

2. Involve the family in planning.  

If you’re looking to manage your family wealth now and into the future, you need generational wealth planning. That requires involving multiple generations in the planning, at least on a part time basis. If you have adult children, for example, it’s a good idea to bring them into the conversation with your wealth management team. 

Some parents hesitate to share all their financial information with their adult children, and that’s ok. You can simply have an introduction meeting to let the children meet your advisors; they don’t have to be filled in on everything about your finances. However, simply introducing your adult children to your wealth management team can help put your mind at ease because they will know where to turn when they have a need, such as estate transitions. 

Even if an estate transition is many years away, it’s important to continuously ensure that your planning objectives are aligned with your life situation and goals, and that appropriate family members remain on pace with your status and progress toward those goals. 

3. Coordinate your financial plans with an estate planning attorney. 

Your estate planning attorney should be an important part of your wealth management team. If you don’t have an estate planning attorney, ask your wealth manager to recommend one. 

At a minimum, your estate plan should include these documents: 

  • Will. Review your will periodically to make sure it’s not outdated and revise it if necessary. Dying without a will means the state will get to decide what will happen to all your assets. 
  • Power of attorney. This form allows you to appoint another person to act on your behalf and make decisions about finances, real estate and business, in case you become incapacitated. It’s best to communicate with family members about who you have selected and your reasons for selecting this person to diffuse any potential family conflicts later. 
  • Healthcare directive. This document should outline your wishes in case you become incapacitated and unable to make decisions about your own health. Make sure the document stays updated and your family knows where to find it. 

Depending on your situation and goals, your estate plan may also include one or more trust documents. 

4. Incorporate tax planning into your financial plan.

As you make financial decisions and plans, it’s crucial to keep in mind the tax implications of each decision. It’s best to work with a wealth planning firm that can provide tax-centric oversight for today and the future, as well as investment planning. Most wealth planning firms can recommend tax advisors to help you, but some, such as Davie Kaplan, have tax advisors working with wealth management as part of the service team. As a result, tax insights are always considered in all wealth planning decisions. 

5. Include life event planning in your long-term plan. 

Wealth planning isn’t just about preparing for retirement. In addition to planning for a financially secure retirement, your generational wealth plan should also include plans for all the future life events you expect to experience with your family. That might include funding college educations, purchasing one or more vacation homes, creating a foundation, funding trust accounts, preparing for long-term care, and any legacy gifts you want to provide to your family. 

Contact us to learn more about how Davie Kaplan’s team approach to financial planning can benefit your family for generations to come.  

Categories: Financial Planning