FAMILY WEALTH

Generational wealth planning is a strategic approach to managing and preserving wealth across multiple generations within a family, and requires very careful planning and decision-making to ensure that wealth is passed down thoughtfully and with as little intra-family controversy and conflict as possible.

Our family wealth management services, which generally begin at $5 million in account value, are rooted in New Capital’s original service as the family office for its very first client: Leonard’s own family. Since New Capital’s founding, we have, on an almost daily basis, assisted in all aspects of family wealth, including:

• Administration: Multi-generational family wealth requires an enormous amount of administration. Funds transfers, processing and management of gifts, asset valuations, trust management, family partnership management, tax management, documents retention, and more all call for skilled, experienced, and reliable handling.

• Financial Education: To ensure that later generations understand how to responsibly manage inherited wealth, it is crucial to educate members about the responsibilities and management of personal finances, investments, and ownership.

• Estate Planning: Comprehensive and top-notch estate planning is essential for thoughtfully passing wealth to next generations. Designating beneficiaries, drafting wills, and establishing trusts can provide direction and control over how assets are distributed and protect them from irresponsible spending, creditors, or even ill-intentioned family members, friends, or third parties.

• Tax Planning: Minimizing tax liabilities is a key (though not necessarily always primary) aspect of generational wealth planning. Strategies such as intra-family gifting, intra-family lending, charitable giving, and tax-efficient investments can help reduce estate taxes, gift taxes, and capital gains taxes, while helping to maintain wealth for beneficial purposes.

• Asset Protection: Protecting wealth from potential risks such as lawsuits, creditors, or divorce can be accomplished via trusts, limited liability entities, and insurance products.

• Family Governance: Establishing family governance structures can help maintain harmony and clear communication among family members. This may include setting up family councils, defining decision-making processes, and creating mechanisms for resolving conflicts.

• Philanthropy: Encouraging a culture of philanthropy within the family can be an important part of generational wealth planning. Establishing charitable foundations or donor-advised funds can help family members support causes they care about while also providing tax benefits.

• Succession Planning for Family Businesses: If a family owns a business, succession planning is absolutely critical to ensure a smooth transition of ownership and management to the next generation. This involves identifying and preparing successors, establishing buy-sell agreements, and implementing strategies to minimize disruption to the business.

• Regular Review and Updates: Generational wealth planning is not a one-time event, but instead requires ongoing review and adjustments to adapt to changes in family circumstances, laws, and financial markets.

By implementing some or all of these strategies and principles, families can create a roadmap for preserving wealth and ensuring its positive impact for generations to come.