Building a Legacy: The Entrust Wealth Partners Approach to Family Wealth Planning
When it comes to managing family wealth, many people immediately think about maximizing returns or minimizing taxes. While these are important considerations, successful multigenerational wealth management requires a more structured approach. At Entrust Wealth Partners, we use what we call the Family Wealth Priority Pyramid to help families make clear, confident decisions about their wealth.
OUR COMPREHENSIVE APPROACH:
Step 1 - Parental Financial Security
The foundation of any family wealth plan must be the financial security of the wealth creators themselves. This isn't about luxury or excess – it's about ensuring that parents have sufficient resources to maintain their desired lifestyle, cover healthcare costs, and handle unexpected expenses throughout their lifetime. Without this foundation, all other wealth planning becomes uncertain.
Key Questions to Consider:
- Have you stress-tested your retirement plan against various market scenarios?
- Is your long-term care strategy fully funded?
- Do you have adequate liquidity for unexpected expenses?
- Are your income sources properly diversified?
Step 2 - Next Generation Well-being
Once parental security is established, we can focus on children and grandchildren. However, this level requires careful balance between the goals and wishes of the parents and both the known and unknown needs of the future generations.
Strategic Considerations:
- Education funding strategies
- Career development support
- First-home purchase assistance
- Family business succession planning
- Early inheritance strategies for major life milestones
Step 3 - Community Impact
The last area of consideration is giving back to the broader community. This might include charitable giving, foundation creation, or impact investing. However, it's crucial to note that this level only becomes a focus after the foundation and middle levels are secure.
Impact Opportunities:
- Charitable giving strategies
- Family foundation development
- Donor-advised funds
- Impact investing
- Legacy planning
Why the Pyramid Matters: Real-World Application
The power of the pyramid lies in its ability to create clarity around financial decisions. For example, when faced with the question of whether to make a significant charitable gift, the pyramid helps families evaluate:
1. Will this gift impact our long-term financial security?
2. Are we maintaining adequate resources for our children's and grandchildren's needs?
3. Is this the most effective way to achieve our charitable goals?
Common Pitfalls to Avoid
1. Skipping Levels: Sometimes families jump straight to Next Gen or Community planning, before fully securing their own financial health, which can create future financial stress.
2. Lack of Communication: Not discussing your decision-making structure or planning approach with family members can lead to misaligned expectations.
3. Inflexible Planning: Your strategy should be reviewed regularly as family circumstances change. At minimum, we recommend reviewing and refining every one to two years.
4. Unclear Priorities: Without specific goals at each level, decision-making becomes more difficult which can dilute results and level of impact you’re able to achieve.
Taking Action: Schedule a Check-in
Navigating multigenerational wealth planning can be complex, but right now is the perfect time to gather your family and discuss your wealth priorities.
If you haven't reviewed your family wealth strategy recently, now is an excellent time to schedule a meeting with your Entrust Wealth Partners advisor. We can help you:
- Identify any gaps in your planning
- Develop strategies for addressing new family dynamics or goals
- Create a roadmap for implementing any necessary changes
Contact your Entrust Wealth Partners advisor today to schedule your family wealth planning session. Together, we can help ensure your family's legacy continues to grow and thrive for generations to come.
