Tag: Estate Planning

Feb 28th

Thinking of Selling Your Business? Sell Smart

Smart entrepreneurs look far beyond financials.

“The difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next,” Michael E. Gerber wrote in his book, The E Myth. The sentiment applies to entrepreneurs approaching the impending sale of the business they built: They must create the most favorable conditions to achieve their desired outcome, which can go far beyond optimizing the balance sheet and achieving a high valuation multiple.

Business owners are used to looking at all sides of a transaction, and that skill comes in handy with the ultimate transaction–the sale of the business itself. It is vital to consider not only the financial and tax consequences of such a sale, but also the impact on one’s family situation, next generation planning, other business holdings, and charitable giving pursuits. When all is said and done, you want to know that you maximized opportunities, minimized regrets, and positioned yourself for a rewarding next chapter. This doesn’t happen without thoughtful and timely planning.

Keep these three things in mind so that you can sell smart when you sell your business:

1. Enlist help.

Oftentimes, that’s where a certified exit planning advisor can come in to help strategize and execute the steps leading up to, and following, a sale. At Whittier Trust, the oldest multifamily office headquartered on the West Coast, we take a holistic approach that prioritizes investments, family relationships, and tax, estate, and philanthropic planning. By spending time getting to know clients’ needs and goals, we’re able to help avoid obstacles and optimize results. Often, by taking this approach and thinking ahead, we seek to help them achieve the best results possible. We focus on surrounding the entrepreneur with Whittier and non-Whittier professionals who will collaborate to educate, strategize, and help the business owner exercise more control over personal, financial, and business outcomes that might otherwise be left to chance.

2. Look beyond the bottom line.

One way our Whittier Trust team helps entrepreneurial business owners navigate a potential sale is by doing a deep-dive to understand the impact the sale of the business may have on your business goals and your personal life. In addition to fact-finding about the business itself and how it’s structured, the team works to understand the motivations behind why you built the business, why you’re prepared to sell, and how to best achieve your goals for the future. Here are some questions to help get you started:

  • What prompted you to start the business in the first place?
  • Why are you thinking about leaving the business?
  • Do you have a timeline in mind for your exit?
  • What’s your vision of the ideal transition?
  • What personal or business objectives would you like to see accomplished in the transition?
  • How do you expect exiting the company to impact your life?
  • Do you want to stay involved in the business after the sale?
  • Do you expect any family members to remain active in the business?
  • Are you concerned about any family issues?
  • How do you expect your key employees to be impacted?
  • Are you concerned about any employee issues?
  • Do you anticipate any partner or shareholder issues?
  • How important is preserving the legacy of the business?
  • Have you identified a successor(s)?
  • Have you taken steps to formalize a transfer arrangement?
  • What are you most concerned about relative to the transition?
  • Have you had the business appraised in the last 12 months?
  • Have you worked with anyone to evaluate the health of the business?
  • How will exiting the business impact your personal financial situation?
  • Does anyone else depend on the business for income or financial support?
  • Do you currently have a wealth management consultant?
  • Do you have an estate plan?
  • Do you have a plan for optimizing tax efficiency and savings related to the transaction?
  • Have you estimated your cash flow needs after the transaction
  • To what extent do you expect to rely on proceeds of the sale to meet your post-transaction cash flow needs?
  • What are your post-sale goals?
  • Are there any family dynamics that might be a cause for concern when the sale happens?

3. Establish a realistic timeline.

This list of questions isn’t exhaustive, but it’s designed to help uncover risks and planning opportunities that are best addressed months, or even years, before the sale. Understanding your priorities is the first step in maximizing the success of your outcome.

Keep in mind that to increase your chances for a big win, it is essential that you coordinate with your professionals to tailor the results to your needs. At Whittier Trust, we have years of experience working with legal, accounting, and business advisory teams to ensure that the specifics of your deal will focus on the outcomes you seek from a holistic perspective. No two businesses are alike, just like no two families are the same, and we take pride in being the partner business owners can count on to pave the way for the result they want. Clients who have the most successful sales start thinking about the process early and focus on the personal results they want to achieve as well as the financial payout.

To learn more about how Whittier Trust can help you with the transition away from your business, start a conversation with a Whittier Trust advisor today by visiting our contact page.

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Feb 21st

Aging: The Overlooked Risk Factor

Elder care is a personal and financial vulnerability many people fail to plan for.

Wealth can shield you from many of the hardships of life, particularly the discomforts of aging. Luxury retirement accommodations, private caregivers, and the best medical care can smooth the sometimes bumpy path of later years.

But money can’t insulate you from the personal complications of aging. Everyone has tough decisions to face and weighty conversations to initiate with loved ones. Having a knowledgeable partner to help facilitate those discussions and transitions is a privilege no one should forego if they can afford it.

“At Whittier Trust Company, elder care is integrated into the continuum of family office services we provide for clients in collaboration with trusted partner companies,” says André B. van Niekerk, Senior Vice President, Business Development. “Quite often, families end up facing complicated care decisions in the heat of the moment, after a hospitalization or other emergency. With our network of expert partners, we help families prepare for the inevitable and manage it when it comes.”

Failure to plan ahead for elder care makes your family vulnerable to financial risk as well as mental and emotional duress. Van Niekerk and his team spoke with one of Whittier’s partners, Barbara Oberman, CEO and President of Senior Living Solutions, about those risks and how they can be prevented or mitigated.

Crisis vs. Preparation

Making a decision in a time of crisis is never ideal. “It can be a trial by fire,” Oberman says. “I was fortunate that when my mother was hurt, I had already set up a plan, and it gave me the ability to act quickly and decisively.” 

Planning ahead with your Whittier team and exploring options for care in advance ensures you can make the most of available resources, such as long-term care insurance policies, which may help cover certain care expenses. Medicare and supplemental insurance primarily cover medical expenses, so understanding these limitations is key to preparing for non-medical or long-term care needs.

Overload vs. Confidence

Assisted living, independent living, board and care, memory care, or caregivers —there’s an entire spectrum of possibilities, and the differences are often hidden in the fine print. Do you need help with meal preparation or medication management? Do you want activities and socialization? Oberman recalls: “One client came to me after moving their father into assisted living. They were genuinely surprised to find he didn’t have someone by his side to take care of him all the time. But that 24/7 type of service only comes with a private caregiver. It was stressful for them to have to fix that mistake.” 

An upfront needs assessment avoids such mishaps by covering all the factors in advance, such as medical conditions, mobility levels, budget, preferred locations, desired activities, and cognition levels. “We’re like a real estate agent,” Oberman says. “We help you identify your needs and wants, then help you navigate the many moving parts until we reach the best solution. We help moderate tough conversations, analyze choices, and even assist in the move to a new place.” 

Liability vs. Expertise

It is important for families to realize that if you hire private caregivers, you become an employer, with payroll and management responsibilities. You must follow labor laws or you could put yourself in financial jeopardy. Homeowners' insurance typically covers visitors, but often doesn’t cover regular household workers. A reputable agency will handle background checks, pay taxes, and provide workers' compensation for caregivers. If you are certain private care is your preference, however, Whittier Trust and a consultant like Oberman can help you with those arrangements.

We can also help find the ideal senior living community. "Many of these communities are part of national chains, but each one is unique,” Oberman explains. “We build relationships with local staff, visit each community in person, and review their history (including any violations or required corrections). Senior living communities must meet state licensing requirements, and we carefully check these reports to ensure they provide high-quality care before making a recommendation. We know all the finer points of each company’s approach and care philosophy, amenities, and costs.” 

Sales Pressure vs. Concierge Service

The last thing you need during this difficult transition time is a heavy-handed sales pitch or dire warnings about waiting lists from a sales rep trying to meet monthly quotas. Your Whittier team safeguards you from such tactics, acting as your advocate in comparing different senior living options so you can make an informed decision without pressure. 

“As part of our concierge service, we go beyond just making recommendations,” Oberman says. “We arrange personal tours of the communities you wish to visit, help you navigate paperwork in advance, assist with negotiations to secure the most favorable terms and services and coordinate move-in arrangements. Additionally, we connect you with trusted professionals to assist with selling your home, managing estate sales, and downsizing. Through our network of senior advisors, we provide personalized support to make the transition as smooth and stress-free as possible. Then we’ll check in after the move to address any concerns and ensure everything meets expectations.”

Chaos vs. Consensus

Procrastination is likely to leave you in turmoil if an emergency arises and you’ve failed to talk to your family about elder care. We know it’s not easy, though, to organize such personal discussions or reach consensus with multiple family members and multiple generations. We can help facilitate these conversations, create a plan and budget and keep it updated for whenever it ends up being needed.

“At Whittier, we’re here to help you manage life’s many stressors while maintaining your family’s security, unity, and overall well-being,” says van Niekerk.

To learn more about how Whittier Trust's family office services can make a difference for you and your loved ones, start a conversation with a Whittier Trust advisor today by visiting our contact page.

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Feb 5th

The Overlooked Key to Multigenerational Wealth: Proactive Estate Planning

For many ultra-high-net-worth individuals (UHNWIs), it's easy to believe there will always be time to address estate planning. The demands of running a business, managing investments and nurturing family relationships often take precedence. But estate planning isn't just about preparing for the inevitable; it's about ensuring your wealth survives — and thrives — for generations to come, even in the face of unexpected events.

At Whittier Trust, I've seen too many situations where a lack of proactive planning has created unnecessary stress, conflict and financial strain for families. The good news? With a thoughtful, early approach to estate planning, these crises can often be avoided. Here are some of the critical lessons I've learned from my years in estate planning and wealth management.

Why Early Action Matters

Waiting to address estate planning until it feels urgent is a common mistake. It's human nature to focus on immediate priorities, but this approach leaves families vulnerable to the unexpected. One of the most overlooked aspects of estate planning is ensuring that the right legal structures are in place to address unforeseen circumstances, including incapacity.

Imagine a scenario where a family patriarch or matriarch — the key decision-maker — suffers a sudden illness or accident that renders him or her unable to manage the family's financial affairs. Without a plan in place, this can lead to delays in critical decision-making, confusion over who has the authority to act, and even costly legal battles. Such crises can strain family relationships and jeopardize the wealth that generations worked hard to build.

The consequences of failing to plan for the unknown can be significant. In one case I handled, a family member serving as trustee began losing capacity — repeatedly requesting the same distribution within days, forgetting she had already done so and that it had already been fulfilled. It became clear that she could no longer reliably fulfill her responsibilities, but determining her incapacity and appointing a successor trustee created tension, confusion and delays — three things you never want in the financial world. Without a clear plan, these situations can lead to family conflicts and financial risks, all of which could have been avoided with proactive estate planning.

This is also where powers of attorney play a critical role. Many people assume that simply having a document in place is enough, but these agreements often lack the flexibility to optimize the estate for tax purposes. For example, most powers of attorney grant authority only to make annual exclusion gifts (currently $18,000 per recipient). However, more comprehensive provisions can allow an attorney-in-fact to gift beyond this amount, potentially reducing estate tax burdens significantly. Without this foresight, families may miss critical opportunities to minimize taxes and preserve wealth.

The Hidden Risks of Family Trustees

Another common challenge arises when families don't take the time to fully understand their options and appoint relatives as trustees. While it may seem like a natural choice to entrust a loved one with managing your estate, this can lead to unforeseen complications. Family members serving as trustees are often unprepared for the legal, financial and emotional responsibilities the role entails. Worse, they may face undue influence or capacity issues that compromise their ability to act in the best interests of the estate.

As an unfortunate example of undue influence, a patriarch serving as trustee became entirely dependent on a caregiver for his daily needs. This caregiver isolated him from his daughters, changed the locks on his home and persuaded him to create a trust for the caregiver's grandchildren. Such scenarios are heartbreaking but also preventable with the appointment of a corporate trustee.

Corporate trustees can offer an impartial, professional alternative. Unlike family members, a corporate trustee doesn't age out, lose capacity or develop emotional conflicts of interest. This neutrality preserves healthy family relationships and ensures fiduciary responsibilities are upheld.

Beyond the logistical benefits, a proactive estate plan can mitigate the emotional strain that often accompanies wealth transitions. For example, I worked with a family that inherited a strip mall in Los Angeles. Purchased by their grandparents, the property was deeply sentimental to one sibling, but financially burdensome to the others. Despite a lucrative offer to sell, the emotional attachment of the sibling serving as trustee created a rift that took years to heal.

A corporate trustee could have handled the situation differently, prioritizing the long-term financial well-being of all beneficiaries. By removing emotions from decision-making, corporate trustees can help families avoid these types of conflicts, fostering unity instead of division.

Protecting the Next Generation

One of the most meaningful aspects of estate planning is preparing the next generation to manage the wealth they inherit. This involves more than financial education; it's about instilling values and fostering stewardship. Trust provisions can be structured to encourage responsible behavior, support charitable giving and provide for future generations without creating dependency.

By engaging in open conversations about your intentions, you can help your heirs understand their roles and responsibilities. This transparency reduces the likelihood of misunderstandings and ensures your legacy is managed in a way that aligns with your vision.

A Call to Action

As UHNWIs, you have the resources and influence to shape your family's future for generations. Don't let procrastination or a false sense of security jeopardize the legacy you've worked so hard to build. Proactive estate planning is not just about protecting assets; it's about preserving relationships, minimizing stress and creating a roadmap for your family's continued success.

Whether it's revisiting your powers of attorney, appointing a corporate trustee or ensuring your trust provisions reflect your values, every step you take today can prevent potential crises tomorrow. Estate planning may not always feel urgent, but its impact on your family's future cannot be overstated. As someone who has spent decades helping families navigate these complexities, I can't emphasize enough the importance of starting early.

Sharon Perlin is a Senior Vice president and Client advisor at Whittier Trust's Seattle Office, which celebrates its 25 anniversary this year.

Featured in Family Business Magazine. For more information about proactive estate planning, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Jan 21st

Whittier Trust Celebrates 60 Years in the Pacific Northwest

Company Proudly Marks 25th Anniversary in Seattle 

Whittier Trust, the oldest multi-family office headquartered on the West Coast, celebrates two major milestones in 2025: 60 years of service to the Pacific Northwest and the 25th anniversary of our Seattle office. Our legacy in the Pacific Northwest began in the 1960s with founder Paul Whittier's vision and passion for the region. With a rich history and an enduring commitment to clients, Whittier Trust has been a trusted partner to generations of families and local community organizations throughout Puget Sound.

“As we celebrate six decades in the Pacific Northwest and 25 years since opening our Seattle office, we are immensely proud of our rich history and enduring commitment to our clients and the region’s future,” says David Dahl, President and CEO of Whittier Trust. “We look forward to upholding our dedication to excellence and delivering tailored wealth management, family office and trust services for generations to come.”

The Whittiers were visionaries who recognized the potential of the Pacific Northwest. Their passion for the region’s natural beauty initially led them to Goudge Island in British Columbia, which they purchased in 1949, and then to the San Juan Islands, where they dedicated themselves to philanthropic endeavors. 

Today, Whittier Trust’s support of local organizations—including the Friday Harbor Airport, Seattle’s Museum of Flight, San Juan Airlines, Shuttle Express and the San Juan Community Theater—continues to leave a lasting impact on the community. The Whittier Trust team remains actively engaged in supporting these vital entities.

“Paul Whittier’s vision to expand our family office, wealth management and trust services to multi-generational families in the Puget Sound region—anchored by the values of duty, loyalty and commitment—continues to inspire us as we build on our strong foundation,” says Nickolaus Momyer, Northwest Regional Manager, Senior Vice President and Senior Portfolio Manager at Whittier Trust. “We are proud to honor the Whittier Family’s legacy by delivering innovative solutions and personalized service to our clients.”

To view a timeline commemorating the Whittier family’s legacy and Whittier Trust’s impact throughout the region, click here.

Beyond its impact in the Pacific Northwest, Whittier Trust is globally recognized by the Society of Trust and Estate Practitioners (STEP) as one of the top five multi-family offices in the world. The company has also been named one of Washington’s 100 Best Workplaces by the Puget Sound Business Journal, underscoring the company’s dedication to cultivating a positive, productive work environment that empowers its team to exceed client expectations.

Throughout this year, Whittier Trust will host several events and programs to deepen relationships with clients, their families and the local community. Follow Whittier Trust on LinkedIn to learn more about these initiatives and how the company plans to honor this commemorative year. 

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For more information about Whittier Trust's wealth management, estate planning and family office services, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Jan 17th

Strategic Wealth Planning for UHNWIs for the Second Trump Administration

The new year will present challenges and opportunities for ultra-high-net-worth individuals as they re-evaluate their portfolios and long-term financial plans in light of President-elect Donald Trump’s incoming administration. Strong partnerships between UHNW clients and their advisors will be essential during this transition and the ensuing four years. Proactive planning will be key, especially given potential shifts in tax laws, market dynamics and interest rates.

Tax Law

Before Trump’s election in November, many ultrawealthy families were scrambling to optimize their estate plans ahead of the scheduled sunset of the Tax Cut & Jobs Act to take full advantage of exemptions while they remained in place and to adjust estate plans when and if those exemptions reverted at the end of 2025.

The policy uncertainty in 2024 paved the path for families and their advisors to give more consideration to their legacy and how it will affect their extended family in the future. The impending tax law change forced conversations around important estate planning considerations such as dispositive provisions, age attainments, and wishes for the use of the hard-earned wealth for future generations. The difficult decisions around the mechanics of intergenerational wealth were front and center leading up to the election.

However, with the incoming administration, it’s likely that the TCJA will be extended or even made permanent. UHNWIs and their advisors should continue to review their estate plans and build on those important conversations despite having more time to approach their plans strategically.

This extended horizon also allows for a renewed focus on aligning investments and real estate strategies with enduring goals, emphasizing tax efficiency, diversification and legacy planning. Advisors should take this opportunity to evaluate the use of tax-advantaged structures, optimize trusts and consider philanthropic vehicles that can minimize tax burdens while fulfilling broader family objectives.

Market Dynamics

From deregulation to policy shifts on renewable energy sources to protectionist economic policies, Trump’s election will hold many implications for investors and their portfolios.

The stock market’s reaction to the election results was initially positive. The day after the election, 3 in 4 companies traded higher, with the three major indices reaching record highs. As investors digested the possible policy changes under the new administration, markets in November saw a strong post-election rally, led by small-cap stocks and supported by gains in large-cap indices. However, recent Federal Reserve interest rate cuts and signals of a cautious monetary policy approach for 2025 have sparked turbulence, with major indices like the Dow, S&P 500 and Nasdaq experiencing sharp declines in mid-December.

Projected winners are expected beneficiaries of deregulation including banks; energy-related companies (especially in the liquified natural gas space); cryptocurrencies, particularly bitcoin; technology companies facing increased anti-trust exposure; and Tesla with Elon Musk leading the newly formed Department of Government Efficiency, or DOGE, committee.

Projected losers are companies in the renewable energy space, including EVs not owned by Elon Musk and utilities invested in renewable energy sources. Other losers, given Trump’s protectionist platform, include international companies broadly, and China specifically.

It is still unclear how the markets will treat healthcare companies. Managed care organizations initially saw a bump in anticipation of a hoped-for easing in pricing scrutiny.  Since the election, MCOs have been selling off (CVS Health’s Stock has fallen 24% in December with UnitedHealth Group and Cigna Group also experiencing substantial declines), with the expectation that they may be more heavily scrutinized if Robert F. Kennedy Jr. is confirmed to head the Department of Health and Human Services. The industry-level volatility may create opportunities for investors with the ability to tolerate short-term pricing aberrations if the policies are more moderate than feared.

Seriously, Not Literally

As the markets react and overreact to policy decisions, we are reminded that the new administration should be taken "seriously" but not "literally." Advisors and clients should keep in mind that administrations rarely achieve everything they set out to do. The challenge will be to react to a broader understanding of what the administration intends to focus on rather than fearing the most radical proposal or enacted policy.

Regardless of what policy shifts come to pass, the time-honored values of successful planning remain the same: prioritizing long-term strategies, tax efficiency and high-quality companies. It’s important for the advisor to encourage clients to stay disciplined, avoid being too hasty to react, and emphasize strategic consistency within a portfolio.

Having said that, it’s also important to communicate often with clients about shifts and expected changes within market cycles, as there are opportunities to be seized within any market environment.

Caleb Silsby is the Executive Vice President, Chief Portfolio Officer at Whittier Trust, overseeing a team that collaboratively manages portfolios for high-net-worth clients, foundations, and endowments. He is credentialed as a CFA Charterholder and CFP professional.

Featured in Barron's. For more information about private market investments, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

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Nov 26th

Wealth Education: Fall Back Into Financial Discipline and Secure Your Family’s Future

As the fall season and the upcoming new year usher in a sense of fresh beginnings, they provide an ideal opportunity to revisit an essential aspect of family wealth: preparing younger generations to manage and preserve it responsibly. Just as students gain knowledge for their futures, educating heirs about financial discipline and responsibility equips them to handle the complexities of wealth. This season is a perfect time to embrace a mindset of renewal and growth in family wealth education, establishing a legacy that will benefit future generations.

Wealth education is a crucial element of estate planning, empowering heirs to understand and build upon the foundation their families have established. Here are five strategies to create a culture of financial responsibility and stewardship within your family, and how Whittier Trust’s family office services can play an influential role in your journey.

1. Start Early

Integrating financial education at an early age is paramount to personal development. Foundational skills like budgeting, saving, and investing can be tailored to fit each stage of development, ensuring that wealth management becomes second nature. These early lessons should progress from simple financial activities, such as managing allowances or setting savings goals, to more complex discussions and experiences that develop a lifelong understanding of prudent wealth stewardship. Fostering these responsible habits will set your children up for success, supporting their futures in many ways.

2. Create a Family Legacy

 True wealth education extends beyond numbers; it instills a deep-rooted understanding of hard work, family values, responsibility, and philanthropy. Children should be taught that wealth extends beyond financial capital—it represents the power to create, impact, and foster societal change. Family discussions centered around shared goals, charitable initiatives, and community contributions not only reinforce these values but also inspire a sense of purpose that transcends material wealth. 

3. Involve Advisors

Navigating the multifaceted nature of wealth management requires expertise, and a family office can play a vital role in supporting families through this journey. Engaging trusted advisors provides heirs with guidance that goes beyond family conversations, introducing them to the nuances of wealth management from a professional standpoint. At Whittier Trust, our team of advisors works alongside families to guide them in creating structured wealth education, ensuring heirs receive advice that reinforces family values and clarifies their financial responsibilities.

4. Foster Open Communication

Effective wealth stewardship is built on a foundation of open communication. Transparent discussions about the complexities of managing significant assets help develop a clear understanding of roles and responsibilities within the family structure. By encouraging questions and facilitating conversations about wealth, families create an environment where heirs feel empowered to participate actively and responsibly in managing the family estate. Such dialogue mitigates potential future conflicts and reinforces a unified family approach to wealth.

5. Embrace Continuous Learning

Financial education should be an ongoing process, with each generation adapting to new financial landscapes and personal milestones. Incorporating continuous learning into family life—through discussions, advisor-facilitated workshops, or shared learning activities—ensures that heirs remain well-prepared to manage their assets as circumstances evolve. This commitment to lifelong learning fosters resilience and a proactive mindset, hallmarks of responsible and adaptive wealth management.

As you look to the future, consider how investing in wealth education can fortify your family’s legacy. By instilling these principles, families create a framework for future generations to navigate their financial responsibilities with acumen and respect for the values that define their family. By embracing these strategies, supported by Whittier Trust’s comprehensive expertise, families can establish a tradition of disciplined wealth stewardship that secures their prosperity and purpose for years to come.

To learn more about wealth education and the stewardship a multi-family office can offer future generations, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

 

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Nov 18th

Weathering the Storm: Preparing for the Unexpected in Wealth Management

In a world where sudden shifts are inevitable, natural disasters such as the recently devastating Hurricanes Helene and Milton are powerful reminders of life’s unpredictability. Such events highlight the importance of robust financial preparation for ultra-high-net-worth individuals (UHNWIs), especially on the West Coast—an area prone to natural risks. While personal disaster preparedness is key, UHNWIs should also focus on “storm-proofing” their estates and real asset portfolios. Just as it's necessary to reinforce a home to withstand a hurricane, safeguarding wealth from the unexpected requires a strategic approach. Proactive wealth planning can act as a financial safety net, helping to ensure financial resilience against both environmental and economic storms and unforeseen complications.

What Are The Challenges For An Estate?

Earthquakes, wildfires, and other natural disasters can create challenges for property, businesses, and financial portfolios. In 2020 alone, OEHHA reported that California experienced a record high of 4.2 million acres burned, which was more than 4% of the state's land. As of October 22, 2024, Cal Matters has recorded 1,708 structures that have already been destroyed by wildfires this year. The California Department of Conservation also estimates that the state's annual earthquake loss is around $3.7 billion. 

UHNWIs are advised to consider not only that real assets could be in danger but a broad spectrum of risks—including family challenges, market volatility, and even potential economic disruptions—that could impact their financial well-being. By aligning wealth management strategies with these regional threats, UHNWIs can create more resilient financial plans.

Staying Ahead of Risk: You May Not Be Thinking About It, But a Good Advisor Is

Ultra-high-net-worth families and individuals already have much to consider, and while they’re deeply invested in managing their estates, they may not fully grasp the range of challenges that could impact their assets. In other words, people often don’t know what they don’t know to look for. Fortunately, multi-family offices and experienced advisors do, and it’s proven to be a sound practice to trust long-term preparation and proactivity to the professionals. 

As an example and an area of focus often impacted by “Acts of God,” Whittier Trust helps clients stay on top of essentials like insurance, ensuring that their coverage matches the current value of their properties, collections, and other real assets and is comprehensive enough to mitigate for any number of events. Proper coverage for homes, collectibles, and other valuables is essential in regions prone to earthquakes and wildfires, where the cost of damage can quickly escalate. Additionally, business owners may need specific policies to protect against disruptions from natural events, ensuring continuity and stability despite environmental challenges. The peace of mind that comes with knowing your family office has thought through every detail—both expected and unexpected—means clients can focus on their passions, families, and future without worry. It’s about being able to enjoy the present, knowing the future is secure.

For ultra-high-net-worth families, a trusted family office does more than manage finances—it handles the day-to-day, so clients can focus on what truly matters, while also preparing for the unexpected. A family office like Whittier Trust is dedicated to looking out for every aspect of a client’s wealth, anticipating needs they may not even be aware of, from tailored insurance coverage to proactive asset protection.

Protecting Real Estate Assets

Real estate can be an impactful asset, but it comes with its own set of risks—especially in regions prone to natural disasters. For the same reasons that Whittier Trust portfolio managers diversify to mitigate the effects of market instability and disaster-related threats on investments, Whittier Trust understands these challenges and takes a “storm-proofing” approach to managing real estate portfolios. This means not only diversifying locations but also selecting properties and investment strategies that can weather market and environmental changes. What sets Whittier apart is their in-house real estate team, which actively manages assets with an eye toward both protection and growth—a unique benefit few family offices offer.

Communication and Education: Ensuring the Family Is Prepared

Preparing for the unexpected isn’t just about securing assets; it’s also about ensuring that family members are prepared. Whittier Trust holds firm to the belief that open communication and education are essential. Our team understands the unique dynamics of family relationships and helps navigate these to promote cohesion and clarity, particularly in times of change or uncertainty. By working closely with families to keep them informed on the protections and strategies in place—from insurance to estate plans—we ensure that each member understands their role and responsibilities in case of an emergency.

Empowering the next generation with financial stewardship education is also a crucial piece of preparation that multi-family offices and wealth management advisors employ to ensure younger members of the family are ready to take on future challenges and responsibilities. Family meetings led by Whittier Trust advisors not only keep everyone informed and engaged but also foster a culture of resilience across generations, making it easier to adapt and respond effectively to the unexpected.

Estate Planning: The Silver Bullet of Preparedness

Estate planning is one of the most valuable tools for preserving family wealth against all manner of challenges. Whittier Trust focuses on creating estate plans that account not only for life’s expected transitions but also for impactful natural events and sudden changes within the family or Family Business. A comprehensive estate plan includes everything from trusts and charitable foundations to provisions for asset distribution and protection in unexpected circumstances. Our goal is to ensure that, no matter what happens, your family’s vision is safeguarded, and your legacy is protected for generations to come.

By working with a multi-family office to prepare for both expected and unexpected events, UHNWIs can build resilience and confidence, allowing them to weather not only financial storms but also life’s inevitable shifts with stability and foresight.

To learn more about how an experienced multi-family office can help protect your assets, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Nov 14th

Assessing the Need for a Family Office or Transitioning an Existing One

For individuals and families of significant wealth, managing a substantial portfolio of assets and investments demands a sophisticated and comprehensive approach. From financial planning and asset management to legal and tax strategy, risk mitigation, and multi-generational legacy preservation, there are myriad intricate factors to navigate. This growing complexity has led many affluent individuals and families to establish private family offices—exclusive firms dedicated entirely to addressing the distinct challenges of significant wealth.

Family offices can take various structural forms. Sometimes, these offices evolve organically within a family-owned business over time to meet specific family needs. In other instances, they are established through a family-controlled holding company, often following a significant liquidity event or wealth transfer. Alternatively, they may be operated by a professional multi-family office firm, such as Whittier Trust, servicing the needs of multiple wealthy families collectively.

Regardless of their particular structure, family offices function as the private wealth management and advisory teams for ultra-high-net-worth individuals and families. Their primary goal is to centralize the comprehensive management and stewardship of substantial family assets. These offices offer a range of services, including investment management, estate planning, philanthropic guidance, tax planning, accounting/bookkeeping, real estate administration, and family business oversight. However, most tend to specialize in a few core areas based on the family's specific situation.

The evolution and particular needs of a family office can vary greatly depending on factors like whether the family operates an active business, their generational status, any significant past liquidity events, and the extent of their philanthropic goals. For families led by first-generation wealth creators, the office may concentrate operationally on accounting, bookkeeping, taxes, and growing the founder's assets. Transparency and outside advisory involvement can be more limited.

Families undergoing a liquidity event, such as selling a business or transferring to subsequent generations, often require more comprehensive services. This includes support with multi-generational wealth transition, estate and tax planning, family governance, and philanthropic engagement. Embracing change and collaborating with specialist advisors during this phase is key.

For families with an office spanning multiple generations after a full wealth transition, the focus may shift to maximizing core competencies like investments or charitable activities. These well-established offices rely heavily on robust governing protocols and targeted outside expertise. However, given the private nature of family offices, it can be difficult for them to find opportunities to share ideas and gain outside insight.

Defining family offices presents a challenge, as the industry's interpretation varies widely based on perspectives and context. As the saying goes, "If you've met one family office, you've met one family office." Each is uniquely tailored to individual client needs, current stage, and philosophies regarding legacy and wealth management. Understanding these nuances is crucial for affluent families assessing whether to establish a centralized family office or transition an existing one.

Families can face significant challenges when it comes to structuring a new family office, modifying an existing office, or winding down operations due to the retirement of key employees or shifts in priorities. The cost of setting up or maintaining a single-family office can start at $1.5 million annually and increase substantially from there. Additionally, the ability of a single-family office to adapt to rapidly changing landscapes in areas like cybersecurity, compliance, and technology efficiencies can be costly or difficult to implement effectively.

Partnering with a multi-family office like Whittier Trust can allow families to still look and feel independent while gaining enhanced benefits from leveraging an institutional-caliber platform. These firms provide families with seamless access to sophisticated resources, dedicated expertise across all wealth disciplines, and a permanent governance framework able to evolve with the family's needs over generations—all often with a significant decrease in overall operating cost.

Knowing when and where to partner with a firm that can provide scale, deep resources, and specialized implementation capabilities is vital for affluent families navigating critical family office decisions. By consulting seasoned multi-family office professionals well-versed in the entire lifecycle, families can gain invaluable guidance tailored specifically to their circumstances and long-term goals.

Written by Whit Bachelor, Senior Vice President, Client Advisor at Whittier Trust. Whit is based out of the Newport Beach Office .

Featured in the Las Vegas Review Journal. For more information about how Family Office services can bennefit your family, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

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Nov 5th

Don’t Let ‘Em Buy the Ferrari

Exploring trustee discretionary distributions:

Trustees are often given discretion over the circumstances under which a distribution may be made from a trust to a beneficiary. This article explores some of the factors that are important to consider when giving your successor trustee this power. 

There are many reasons people place money in trust for their heirs. Trusts provide professional management of assets for beneficiaries who either do not want to spend their time on such matters or perhaps do not possess the required skills. Trusts may also provide a level of asset protection from the beneficiary’s creditors. Finally, trusts often protect the beneficiary from their own impulses to spend recklessly. By naming a successor trustee to control distributions from a trust, the protective nature of a trust is more easily preserved.

Most people who place money in trust for heirs want the funds to be available for certain things and not available for others. Frequent reasons for distributions include paying health and education expenses, starting a business, or buying a home. The common joke is that Mom and Dad want their children to be able to buy a car—just not a Ferrari! The challenge is that a successor trustee, particularly a corporate trustee (such as a bank or trust company) is not going to know the beneficiary as well as a family member and may have a harder time weighing the decision to distribute or withhold funds.

Disbursements for health and educational expenses are quite common and straightforward. Absent contrary language in the trust agreement, health expenses would include doctor bills, pharmacy invoices, and health insurance premiums. Educational expenses would typically include tuition, materials, room and board, and even travel expenses. Medical and education expenses that may be considered “alternative” may also be covered unless the trust agreement contains restrictions.

What about funds to start or buy a business? If the grantors are entrepreneurs themselves, they may want to make money available to their heirs for such purposes. In such cases, a good trustee will want the beneficiary to present more than just an idea. At Whittier Trust, we ask the beneficiary to have a business plan and financial projections. An important consideration will be how quickly the business will get to break-even status. It’s best to avoid a situation where the trust will be asked to support future distributions without limitation, or“throwing good money after bad.” While the nature of start-ups is always uncertain, it is good for the beneficiary to be aware of the limitations of the trust.

A similar business plan analysis should be undertaken when the beneficiary wants to buy an existing business or invest capital in a friend’s business. Most corporate trustees will be leery of the latter and often can play the role of “bad cop,” allowing the beneficiary to keep the friendship intact. In such cases, we are happy to let the friend know that the proposed investment is not aligned with the trust’s overall investment philosophy. This has saved more than one beneficiary from making an investment in a pal’s bar or movie.

Many parents and grandparents want the trust funds to be available for the purchase of a home for the beneficiary. In such cases, we will weigh the choices between buying the home in the trust or making a distribution directly to the beneficiary for that purpose. If the house stays in the trust, the trust is often responsible for things such as property taxes, insurance, and capital improvements. The house, as an asset of the trust, remains safe from potential creditors of the beneficiary.

If the funds are given to the beneficiary for the purpose of buying the home, it is important to consider the beneficiary’s ability to support the normal carrying costs of real estate. Will the trust need to make further distributions for insurance and property taxes, or does the beneficiary have resources outside of the trust to handle these? If the home is in a community property state, is there a risk of inadvertently converting the real estate from separate property to community property?

What about the Ferrari? We have yet to meet a grantor who is in favor of the Ferrari-type purchase. After all, if the desire is to let the beneficiary do whatever they want with the money, there is not much need for a trust.

What is the best way for a grantor to convey their wishes to the successor trustee? Trustees are duty-bound to follow the specific terms of the trust agreement, so it’s possible to include very specific distribution provisions. However, given the ever-changing nature of life and the longevity of many trusts, handcuffing a trustee is not optimal. We often recommend that the trust language be broad enough to accommodate unforeseen circumstances, giving future trustees plenty of latitude. The trust agreement can be supplemented by a “letter of wishes” in which the grantors spell out their desires for the use of the funds. While these letters are not legally binding, trustees will look to them for guidance. Most trustees find these very helpful when making distribution decisions.

When looking for professional trustees, it is important to ask them about their practices and procedures when it comes to entertaining a beneficiary’s request for distributions. Some corporate trustees are relatively inflexible and only review requests monthly by committee. At Whittier Trust, we look at requests on a case-by-case basis as they are made since time is of the essence in certain situations. Also, ask if the main objective of the trustee is strict preservation of the trust for future generations or if they are willing to accept a letter of wishes or trust language that favors the current beneficiary. Any good trustee will welcome these conversations in advance of being named in the trust.

For the grantor who is afraid of a recalcitrant trustee, including language allowing the beneficiary or another family member the ability to remove the current trustee and replace them with another trustee may provide additional comfort.

Like with all estate planning, professional advice from a capable attorney is the best place to start. Your lawyer will have had experience with different trustees and will be able to provide a perspective on what they have seen.

Written by Tom Frank, Executive Vice President and Northern California Regional Manager at Whittier Trust. Tom is based out of the San Francisco Office and oversees the investment team for multiple Whittier Trust offices.

Featured in Mountain Home Magazine. For more information, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Oct 15th

Real Estate Wealth Management

The right investment and estate strategy can help create a legacy of real estate holdings that will benefit your family for generations.

In 1891 just before the turn of the century, a young man from Maine named Max Whittier rode a train cross-country to California to seek his fortune. Nearly a decade later, after several failed attempts to find oil, he risked his life savings of $13,000 on land along the Kern River in the southern Sierra Nevada mountains northeast of Bakersfield. By 1903, the area was the top-producing oil field in the nation. Whittier kept the land rather than selling it for a quick profit, and today Kern River remains one of the largest oil fields in the continental U.S. 

Out of the wealth Max Whittier created as a pioneer in real estate, oil, and gas, Whittier Trust was established in 1935 to manage the family’s assets for his four children. In 1989, the company expanded to serve other families, ultimately creating a platform that comprises five core pillars of wealth management:

“These five pillars give us great latitude to tailor investment strategies to individual client goals as part of our multifamily office services,” says Andrew Paulson, who manages a $2B real estate portfolio of diverse asset classes across the U.S. as Vice President of Real Estate at the Whittier Trust Pasadena office. “Many wealth management firms specialize and don’t provide real estate services. But at Whittier, active investment and management of real estate has been part of our platform for over 100 years.”

The Rewards of Real Estate

Real Estate is a unique investment class that performs differently from stocks, bonds, or other investment vehicles. Here are some of the primary reasons why Whittier Trust encourages clients to invest in real estate:

  • Investors have much greater control over property ownership than owning a small sliver of a company through shares of stocks.
  • Although real estate is considered illiquid, real estate values are much less volatile than share prices.
  • Real estate is a good hedge against inflation as rents and values typically increase with inflation.
  • Real estate requires local knowledge. Understanding what is happening on Main Street is as important as what is happening on Wall Street.

“A major differentiator for Whittier Trust is that if a client comes to us with an extensive real estate portfolio our team can hold those real estate assets as a fiduciary, or we can serve as an investment advisor over those assets,” explains Paulson. “In addition, for trusts with real estate assets, we have the ability to serve as trustee, which is a rare advantage among asset management firms.” 

“At the same time, our real estate group actively sources new investments that clients can add to their overall real estate allocation,” Paulson continues. “Our firm portfolio consists of Multifamily, Industrial/Commercial, Office, Retail and Flex Space properties, and we have a broad list of qualified sponsors who are sourcing deals across the country. Throughout the history of the firm client demand has remained very strong for these direct real estate investments and all recent opportunities have been oversubscribed. We are currently focused on sourcing more acquisition opportunities for multifamily and industrial assets to continue to broaden our list of experienced partners and sponsors.”

Estate Planning to Preserve Your Real Estate Portfolio

We’re all taxed on our possessions when we die, and there are only two ways to reduce that tax. You can have fewer possessions, or you can decrease the value of those possessions. Real estate owners are uniquely situated to do both, and Whittier advisors have unique expertise in this area, from initial planning to settling the estate. 

Reducing what you own is the first step. Under current law, an individual can give away $11.5 million of assets without incurring gift (or estate) tax. A married couple can give away twice that amount, or $23 million. So if a real estate owner had a property worth $11.5 million, he or she could give the entire property away within the amount of his or her exemption. That exemption amount is scheduled to be cut in half in 2026.

That brings us to the second step: reducing the value of what you own. Whittier Trust helps real estate owners use another advantage related to estate planning—owning assets inside of entities. We help owners make gifts of their interests in entities while taking valuation discounts for lack of control and lack of marketability (which appraisers typically discount in the range of 30 to 40%). For example, a real estate owner holding a building in an LLC, structured with a typical 1% managing member interest and a 99% non-managing member interest, can gift their 99% non-managing member interest with a 30% discount. 

When a real estate investor passes away, even though estate taxes can often be paid over a 14-year period, the cash flow needed to make those tax payments can greatly reduce the cash available to provide for the family. Or worse, for investors with significant portfolios, such assets may need to be sold to pay estate taxes, and the owner's efforts in putting together a real estate portfolio can be lost—often a lifetime accumulation of irreplaceable assets. With proper estate planning, however, those assets can be maintained to provide support for future generations.

The Nevada Advantage for Multigenerational Wealth

If properly planned, real estate assets can pass not only from the real estate owner to his or her children, but also on to his or her grandchildren by taking advantage of the generation-skipping transfer tax exemption. Whittier Trust helps real estate investors use strategies of gifts or sales to trusts for family members to allow the real estate assets of those trusts to be properly administered for beneficiaries in the future.

“In California, most trusts have termination clauses that restrict a family’s sharing of legacy assets,” Paulson says. “Under state law, trusts have a maximum duration of 90 years (or no more than 21 years after the death of an individual alive at the time the trust was created). Whittier Trust Company of Nevada was specifically created to help California families protect their wealth with the Nevada advantage. Residency is not required to transfer those assets to Nevada-domiciled trusts which under Nevada law permits a trust to remain in effect for 365 years.”

In keeping with Max Whittier’s vision for the land he invested in more than a century ago, Whittier Trust believes real estate is an important component in building lasting family wealth. For clients wanting to pass a portfolio of properties down to children and grandchildren, these long-term trust strategies are just a few of the ways that we help you share that wealth with successive generations. 

To learn more about how the right estate planning strategies and real estate portfolio management can help benefit your family for generations, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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