Despite what some may believe, not all successful entrepreneurs started with a large sum of money, nor did they always come from a privileged background. Many built their fortunes with nothing but determination – determination to turn their vision into reality, and provide for their family. Years of hard work and dedication are well worth it in the end when they can sell their business for a good profit, ensuring their family is financially secure.
Yet, all too often people spend lots of time and energy building wealth, and far less time on ensuring it is preserved. A majority of high net worth families fail to successfully transfer wealth from one generation to the next.
What can you do to ensure your family wealth is preserved? Family wealth advisor Peter Culver focuses on steps families can take.
Start the Discussion Today
While most parents know the conversation about wealth and preservation needs to happen, they wait too long to have it, or don’t have it at all. Problems arise when family members learn of wealth transfers and don’t understand the reasons behind them, and family conflicts occur. Having the conversation today will benefit all family members, from each generation.
Schedule Family Meetings
Family meetings allow everyone to share news and concerns in an open and direct way. You can deliberate and make shared decisions, and everyone is kept on the same page. They also offer the opportunity to teach younger family member about finances and family traditions.
Have a Mission Statement
This is an excellent tool for promoting shared family values. It outlines a family’s goals and priorities, and is used as a basis for making family decisions.
Speak to a professional
Families can benefit from the guidance of a wealth advisor who has the financial expertise and outside perspective to help guide the conversation. Their focus is on the management of the wealth, and they have no emotional ties.