The importance of developing financial literacy and generosity in the next generation

Every family is unique, but virtually all parents hope their children will grow up to be confident, self-sustaining and happy. In short, we hope they’ll be good people and contributing members of society. Families of significant means face unique challenges in this arena, however, because the same wealth that affords them educational, vocational and recreational opportunities has the potential to undermine achievement in their children. 

“Ensuring that a family’s wealth has a positive, rather than negative, impact on kids requires intentionality and thoughtful communication,” says Pegine Grayson, Director of Philanthropic Services at Whittier Trust. “In our 85+ years of working closely with high net worth families, we’ve seen that the key here is to focus on fostering children’s resilience, financial fitness and philanthropic activities and values.” Here are some things to consider. 


Parents’ natural tendency is to want to protect their kids from pain, but too much coddling deprives them of the opportunity to discover their own courage as well as limits. “My mom used to tell me, ‘I can protect you from many things, but one thing I won’t do is save you from the logical consequences of your own actions,’” says Grayson. “I learned important lessons from that philosophy, and also from watching my parents conduct themselves in the community as I grew up.” 

The Whittier Trust Philanthropy Services team encourages clients to model patience and tenacity for their children and to openly share stories about their own failures and how they bounced back from them. Emphasize that the goal is not to avoid mistakes; we’re human and erring is inevitable. Rather, the goal is to own our mistakes, apologize when necessary and take steps to avoid the same ones in the future. Children who learn to treat mistakes and failures as opportunities for improvement will use those skills for the rest of their lives. They’ll learn how to take calculated risks with the confidence that, if they fail, they have the skills and competence to try something new, without expecting others to bail them out. 

Financial Fitness

Members of the Silent and Baby Boomer generations were often taught that talking about money is unseemly, and that orientation can be magnified when it comes to raising their children and grandchildren. Many clients tell us they don’t want to burden their kids with information they may not be ready to understand. 

However, by the time kids are in middle school, they’re usually aware that their family is wealthy. What they lack is the wisdom and perspective to make sense of it. “We encourage clients to begin discussing financial matters in age-appropriate ways once children are old enough to notice disparities between their situation and that of other families,” says Grayson. “This doesn’t mean you should share a detailed balance sheet or even include any numbers. But it’s important to talk about where the family wealth came from, how the family uses it wisely to add value to their lives and how financial decisions about saving, spending and sharing are made.” 

Come up with a strategy to give children age-appropriate ways to practice financial literacy. For example, rather than giving allowances to reward good behavior or as payment for household chores (which should be done just because it’s what family members do), instead use those funds as a tool to teach budgeting skills. 

An Ethos for Giving Back

Help kids make sense of the family’s wealth and become good stewards of what they stand to inherit by being overt about how the family aligns its wealth and values. Talking about what matters most to you and the positive changes you want to see in the world, encouraging your kids to do the same, and then deploying some of the family wealth to promote those changes through charitable giving is incredibly empowering for kids. 

“Many of our clients hope we will help them ‘save their kids from their wealth’,” Grayson notes. “Invariably, we recommend establishing a foundation or donor-advised fund to get kids actively involved in the family’s philanthropic endeavors.”  By participating in the family’s philanthropy, kids develop a spirit of generosity and feel proud of their family’s legacy.  They also learn important life skills such as investment strategies, budgeting, research, humility, respectful listening and communication, and experience the joy that comes from making a positive impact on someone else’s life.” This strategy also helps keep the family united in a common purpose, even as kids grow up and move away.

“Wealthy parents often focus primarily on passing on their assets to their children, which of course is important,” Grayson observes. “In our experience, though, the most successful intergenerational families pay just as much attention to passing on the values and skills that will equip their children to be good stewards of those assets and thriving adults in their own right.” 

By Whittier Trust 

Who doesn’t love baseball, aptly called “The Great American Pastime”? The best games take the fans, players and coaches on a nine-inning journey with highs and lows, demonstrations of strength and strategy, and ultimately, a celebration of the winning team’s victory. 

Whittier Trust Company Assistant Vice President and Client Advisor Austin Barr— a recently converted Angels fan since moving to Newport Beach—sees the game as an apt analogy for the service Whittier Trust provides. “Our founder, Max Whittier, made his own luck when he made the cross-country trip from Maine to California—and we seek to perpetuate that winning streak with our preparation and expertise,” he says. Here’s how. 

Team Effort

The best teams have a well-rounded collection of players who are skilled and specialized for the best team outcome. “The baseball analogy rings true: we play a lot of positions and must be ready for every hit,” Barr says. That can include everything from strategic services such as estate planning to maximize intergenerational wealth and looking for new advantageous alternative investment vehicles to tactical services such as ensuring business continuity or mitigating potential tension between beneficiaries. 

Because Whittier Trust has five distinct but connected divisions—Investments, Trust Services, Family Office, Philanthropy and Real Estate & Energy—their bench is deep and diverse, which provides a holistic and methodical approach to a client’s financial landscape and life overall. For example, some clients come to Whittier for investments and then discover that working with the philanthropic services division can decrease their tax burden to increase their portfolio’s overall value. “It's really white glove service to the extreme,” Barr says. 

Personalized Playbook

As any coach knows, every team and opponent is different, so the best coaches develop a playbook that’s tailored for the season and flexible enough to win the game at hand. Similarly, when Whittier Trust begins working with a new client or family, they spend ample time getting to know the client, asking questions about lifestyle, goals, interests, concerns and much more. As a result, the day-to-day “playbook” may look slightly different for each client and it may change over time, as the client’s needs and goals change—or as life throws curve balls. Whittier Trust takes a nuanced approach and is able to be agile and thoughtful to give the client the best outcome and provide the most comfort along the way. 

Barr notes, “We are actively looking for opportunities to optimize by revisiting goals and priorities regularly.” That could mean proposing an advantageous investment to minimize tax burden, celebrating a new addition to a family by setting up a college investment account or connecting with the philanthropic services team to pursue a client’s charitable passions. No request is too big or too small. 

Prepared for Curveballs

Anyone who has lived through the last few years knows a thing or two about curveballs—thanks to a global pandemic, supply chain delays, a war in Ukraine and the “Great Resignation” that precipitated challenges in staffing. However, a well-rounded team is agile enough to expect that curveballs (or fastballs or changeups for that matter) are going to come, so that none of those events trigger knee-jerk reactions or panic-driven decisions. Instead, Whittier Trust takes a measured, thoughtful approach to whatever the market or the world throws at them. “It’s not a reactive type of thinking. Instead, we thrive in complexity,” says Barr. “Whether it’s the sale of a business and the pre-sale and post-sale planning or looking for opportunities to both preserve and grow wealth, we find a plan and strategy to do what’s right for our clients and their goals.” 

For the Win

No matter what a client’s specific needs are, the Whittier Trust team’s goal is the same: to create a winning strategy. The low client-to-advisor ratio allows them to create and execute a highly customized plan, to be constantly available for questions and to proactively reach out as new opportunities arise. “Our winning strategy is made up of excellent service and ensuring that wealth is preserved over the long term,” Barr says. “We exist to grow and preserve the wealth of our clients, so that their legacy lives on.”

By Whittier Trust

Philanthropy is about helping others, offering invaluable funding to support communities and causes. When family foundations are involved, it gets more complex than simply giving money away. It’s also about preserving a legacy and bringing family members together in the name of a shared cause or purpose. The style and look of a family foundation has evolved, and it’s important to consider how to engage the next generation.

Junior boards—also called associate boards—can be a powerful philanthropy services tool in helping prime the next generation, and they can be highly personalized in structure, style and purpose. They can be as small as four members, or as large as 20, and the age limitations can be anywhere from pre-teen to mid-30s. These launch pads are instrumental in not only growing the foundation’s reach but also growing the junior board members as individuals.

“Junior boards help teach the next generation about the foundation and its mission, how it’s structured and more. It’s a good way to strengthen members’ financial literacy skills. It helps them learn about the value of money, investing the foundation’s assets, learning about the stock market and the power of leaving your money invested so it grows over time,” says Alexandra C. Repko, officer and client advisor for Whittier Trust’s Philanthropic Services. Junior boards can also help strengthen familial ties, prepare members to transition to the main board and help members discover more about themselves. Here’s how.

Strengthening Family Bonds

Junior boards can help strengthen a family’s bond, especially if there are many branches or if the members aren’t particularly physically or emotionally close. “It’s a good way for cousins or more distant relatives to be able to collaborate and decide how and where the money should go,” says Repko, who adds that working together is helpful in making junior board members feel less alone in their giving.

Even close-knit junior boards can deepen their relationship. She recalls one example of a small but well-run junior board that had been working together for many years. Whittier Trust facilitated a connection presentation for them to share during a family retreat, where each member worked with the firm to share more about their choice of organization to support.

“We created a presentation for them to give to each other on the junior board and the greater family. It was during the pandemic so it was over Zoom, but it worked really well. They were able to share with each other, to present their interests and why they chose to give to particular organizations,” she says, noting that the environment made it conducive for creating deeper connections.

“Sometimes, even though you’re family, you don’t always take the time to listen and hear about each other’s interests,” she says. “It strengthened family ties in a natural, organic way.”

Facilitating Family Continuity

Succession is a challenge family foundations often face, so establishing a well-functioning junior board can help smooth the transition to the main board. “Junior boards can promote family continuity,” explains Repko.

It also helps get family members invested earlier, which can also be its own challenge, depending on the level of excitement a junior board member has for the role. That’s where Whittier Trust comes in. “Part of our role is to get the junior board excited,” says Repko, whose team does this by showing interest in junior members as individuals, having strategic conversations and doing site visits to grantees so they can see first-hand the impact they’re having.

Conversely, some junior board members are exuberant and need help focusing their interests and refining their strategies. Whittier Trust steps in and supports them by guiding them through questions to help figure out values to create a common purpose.

Repko recalls one junior board of preteens who were so excited to be participating, but they hadn’t yet identified a mission. Whittier Trust got them together and used a core values game to help. “We identified not only the family’s core values, but their individual values as well,” she says. “When they’re really enthusiastic it’s easier for them to inspire their cousins and other family members.” Getting them involved in the process in the right way at the right time can help fuel a lifelong passion for the family foundation. It can be particularly special to have a junior board because many will have parents on the main board, providing opportunities for bonding and working together.

Inspiring Personal Growth

Repko’s favorite aspect of her job is watching junior board members grow. “They’re able to find out more about themselves and their core values. It’s one of the most beautiful parts—sometimes they think they’re just supporting a charity in their community, but they eventually realize that they have a passion for the environment, or helping women or underserved kids, for example,” she says. “They walk away with a better idea of who they are and what they want to do to make a positive impact in the world. They learn that grantmaking isn’t just a transaction—ideally, it’s a relationship.” The impact of personal growth on a family foundation, especially as it concerns giving, is immeasurable.

Whittier Trust helps create, manage and evolve junior boards, tailoring their recommendations and plans to a family’s philanthropic mission and grantmaking style, while simultaneously helping them find their own philanthropic voice.  “As the next generation moves up, there will be new trends. Junior boards today have different interests compared to their grandparents. And we’re able to welcome and support their new ideas,” says Repko.

By Robert LeBeau

Nevada may be known for its gold rush history, glamorous casinos and high-stakes poker games, but high-net-worth families learn that it’s no gamble to keep their money there. “Nevada is one of the most trust-friendly states. It’s a terrific alternative to placing your money offshore,” says Robert C. LeBeau, a senior vice president and client advisor with The Whittier Trust Company of Nevada, Inc. based in Reno.

Starting in the 1990s Nevada’s leaders watched other states, such as Delaware and South Dakota, amend their laws related to trusts to attract money from high-net-worth individuals. State leaders knew that becoming trust-friendly would help grow the economy. 

Taking those strategic steps has paid off. LeBeau notes that more and more of Whittier Trust’s high-net-worth clients, with their interest in wealth planning—particularly in efficiently passing wealth from one generation to another—have recognized that Nevada can offer both flexibility to achieve their goals and significant tax savings. “We have clients in more than 30 states who are able to set up a Nevada trust by having Whittier Trust as a trustee,” LeBeau says.

Here are three key things that establishing a Nevada-based trust can do for your family.

1. Boost Wealth

Nevada’s laws support wealth maximization for future generations through beneficial tax policies, as The Silver State imposes no income tax, transfer tax or estate tax.

Nevada also allows for what is often referred to as a “dynasty trust,” which provides for a term of as long as 365 years. By contrast, in neighboring California, a trust can last for less than a third of that time.

One family that works with Whittier Trust held multiple long-term trusts in an East Coast state. LeBeau says that transferring those trusts to Nevada let the family avoid state inheritance and income taxes.

2. Shield Assets

“Nevada has a host of forward-thinking laws regarding asset protection that many other states don’t have,” says LeBeau. “Those thoughtful, friendly laws make Nevada a great alternative to establishing a trust offshore in the Cayman Islands and other jurisdictions.” For example, Nevada law provides for asset-protection trusts, known as self-settled spendthrift trusts, that prevent most creditors from attaching trust assets and compelling distributions.

“We’ve had non-Nevada resident clients work with us to establish Nevada asset protection trusts to protect a substantial portion of their wealth from potential future creditors and ensure they have a safety net fund,” LeBeau says. 

3. Stay Flexible 

One of the most powerful advantages of Nevada’s laws is their flexibility as it applies to drafting new documents, amending existing documents and managing investments. “Circumstances can change,” says LeBeau. “In a lot of states, once a trust is in place it’s considered ‘irrevocable,’ making it hard to modify, no matter the reasons a change is warranted.”

Nevada is unique from other states, such as California, because it has statutes that provide for a “trust protector,” a role that either an individual or a trust company like Whittier Trust can fill. “A trust protector can modify an irrevocable trust agreement,” LeBeau explains. “They’ll often do this to respond to changes in law or otherwise to direct action that would be in the best interest of beneficiaries.” The provision for a trust protector is a distinct asset of doing business in Nevada.  

Developing Your Family’s Assets In Nevada

Residents of any state can set up accounts in Nevada to benefit from the state’s wealth-friendly legislation. Here are just some of the options: 

1. Decant a Trust

Many clients come to Whittier Trust with trusts established in other states that they want to decant to Nevada—that is, redistribute assets from a trust elsewhere to a new one in Nevada, on better terms. The Silver State boasts some of the best decanting statutes in the country.

“Nevada continues to enhance its decanting statute to allow for even greater flexibility,” says LeBeau. “A lot of states have decanting statutes, but they vary in terms of what is allowed.  Nevada allows for changes that some of the other jurisdictions do not.”

For example, a married couple with adult children recently came to Whittier for help with trusts established in another state. “As we do with all of our clients, we spent time doing a deep dive to get to know the family and understand their life balance sheet, estate plan and goals,” he says. The family succeeded in decanting those trusts into new Nevada trusts with improved terms that boosted flexibility and satisfied the family’s goals.

2. Implement a Directed Trust

Other clients, often business owners or families with concentrated positions in real estate or a particular security, take advantage of Nevada’s directed trust laws. “Clients may want to be involved in investment decisions, or they may want another trusted advisor or family member who makes decisions about distributions [involved],” LeBeau says. “A directed trust allows for that flexibility. That way clients can maintain some of that control, but they’re able to employ a very favorable trust structure.”

3. Execute a Dynasty Trust

“Many clients come to us looking to build their legacy and maximize wealth for the next generation,” says LeBeau. “We often work with their CPAs, attorneys and other advisors to plan how to structure the estate plan.”

For some families, that means creating a Nevada dynasty trust funded with closely-held stock from the client’s company. “That creates the ability to pass on large amounts of wealth free of state income taxes and Federal estate taxes,” he says. 

Regardless of where you live, aspects of Nevada law can benefit your high-net-worth family now and for generations to come—all without the potential complications of heading offshore.

Thomas J. Frank, Jr

As some of my colleagues know, I am a late-middle age endurance athlete – I compete in triathlons. Recently, on one of my longer training runs, I was thinking that the same qualities required for a triathlon are found in estate planning – particularly, inter-generational wealth transfers. Think of it this way, both endeavors require a good plan. At the beginning of my training season, I plan out various goals to hit prior to race day. Similarly, a good wealth transfer plan starts with a plan for how much the donors want to transfer, to whom and thoughts about time frames.

The second critical component of a successful race is good coaching. The results of my attempts at DIY coaching were not very satisfying. In response, I hired a sport-specific coach and a nutritionist who specializes in working with endurance athletes. The same is true with inter-generational wealth transfers. While it’s easy enough to make cash gifts each year to children and grandchildren, a more thoughtful approach that includes a good lawyer and accountant has a higher likelihood of positive outcomes.

Third, adjustments are ongoing. I know that for as long as I have the health and interest in pursuing triathlons, changes will be required and experimentation is encouraged. These may mean a switch-up in workouts, equipment or fueling. Similarly, with long-term estate planning, little experiments along the way may be helpful. Let’s say a family is interested in philanthropy. Before taking the leap of establishing a private foundation, they may want to “test drive” formal philanthropy by setting up a small donor advised fund. They may find that the donor advised fund is perfect for them. Or they may decide that a private foundation would be a better vehicle to achieve their goals.

In my sport, the selection of races is important to success. I had to compete at a few different distances to determine what kinds of races I wanted to pursue. Location is also important since I am fortunate enough to train in the Bay Area where I am close to sea level and the climate is temperate. In estate planning, families should think about how they want to set up gifts to younger generations. Are long-term trusts the right approach or is something shorter term a better option? Tax laws and trust rules are frequently in flux and family situations are always changing and the solutions will change in response. Flexibility is key.

Finally, what does “success” mean? For me as an aging triathlete, it is unlikely that I will end up on a winner’s podium. I’ve decided that the ability to participate at a reasonably competitive level while remaining healthy and still having time for friends and family is the most important measure of success. In the estate planning context, it may not be about avoiding taxes at all costs. Rather, it may be providing a safety net for future generations while at the same time allowing family members to support causes that are important to them. This could translate into a focus on providing funds for education and entrepreneurial efforts and then giving away the balance to charity.

In estate planning and inter-generational wealth transfer, there is no right or wrong answer when it comes to success and the results. The formula for a winning strategy is the development of a plan, the addition of the right advisors, the flexibility to adapt to changing situations and a clear understanding of the goal.

Tom Frank is a Client Advisor and the Northern California Regional Manager. He regularly competes in Olympic distance and Ironman 70.3 triathlons throughout California.

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

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The parenting and education we provide our children has a profound impact on their future attitudes towards wealth, money, stewardship, and the family business. We have to consider our approach very carefully, as it must be consistent, thoughtful, and disciplined, not exerting too much or too little control. It is ultimately up to them whether they want to pursue the family business or other ventures. It is our job to encourage their passions and be active participants in their lives, giving them all the tools we can possibly offer to make their own decisions and be prepared for any opportunity. There are different methods for each stage of our children’s lives for teaching family history, family business, money, investments, and estate planning.

In early development, from the time they’re born, till they’re about six years old, what is most important for your children is dedicating time and attention to them regardless of your other demands, creating a warm and loving environment to start laying a strong foundation for their character and values. At this age we lead by example, children see and internalize us working hard and being kind and generous to others. The latter end of this stage is also a good time to introduce your children to actual currency. Through an allowance, they will start learning money management and delayed gratification as they realize they need to save for items they really want, a valuable lesson as technology will be ever more present in their lives and needs to be understood as a tool, not a magic wand. At ages seven to thirteen, your children will begin asking questions about money and business, and when this happens you must take the time to provide them with thoughtful answers to encourage a strong work ethic, curiosity, generosity, and a fully functioning moral compass. If they have allowed their savings to grow, this may be a good time to introduce investing. Let them buy a few stocks of companies they know well and introduce basic ideas of compound growth and market behavior in relation to the larger world. To foster creativity and a go-getter spirit, it’s not a bad idea to let them start a simple business, your classic lemonade stand for example, but it’s important that they are actively involved in all aspects of planning and expenses, not just the revenue side, so they may work out themselves how to overcome challenges and understand logistical relationships. If applicable, this is also a good time to teach them the basics of the family business and introduce them to key figures. They may gravitate toward it, or they may not.

Their high school and college years (14-22) will be challenging, and it is critical that you remain an active participant in their lives, as they will have many life-impacting decisions to make during this time. However, it is also essential you recognize that while choices of academic rigor and effort, college, costs, and career path are not to be taken lightly, ultimately it is their choice. As variables grow and life gets complicated, communication becomes increasingly important to properly handle the questions and expectations of all parties. This is also the age to encourage the pursuit of internships. Real-world experience is a must for future employers and a necessity for personal growth. If you own a family business, let them intern at the bottom and learn how to work their way up, so they can understand the hard work that goes into every level of the company and the value of each component to the business overall. After graduating from college, they’re on their own. You can still give advice and help them find opportunities, but this is where your hard work, love, and lessons pay off. They will be on their own journey, and that may involve a career you envisioned for them or even the family business, or it may not. The important thing is maintaining open, honest communication, and bringing them into the fold on estate planning, so they may preserve, protect, and enhance your family’s assets as they teach their own children about stewardship.

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

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Family businesses represent nearly 90% of American businesses and account for roughly 50% of U.S. employment, yet over 70% of these businesses lack a well crafted succession plan. While most owners like the idea of passing the business down to their children, family-owned enterprises often fail by the time the founder’s grandchildren take over. However, taking proactive action can help the family business avoid this and continue to grow and thrive long after the original owner has stepped aside. Looking towards eventual succession and long term business success in general, you should first develop and be able to articulate your long term business vision. You may indeed want to pass on a business legacy to future generations, or your eventual goal may be to sell the company for a significant amount of money. Either way, it’s important to know your goals so that all your efforts are working in harmony with a distinct vision. Once you have a clear objective, it’s time to put a plan in place. Taking this first step can be the hardest thing to do, but it will result in proper successor identification, strengthening of relationships, mentorship, and vision sharing that encourages buy-in from all parties involved. Without a clear plan and well articulated goals, you may leave your company listless and struggling for direction.

Choosing an eventual successor can be a minefield as you’re trying to avoid misunderstandings, hurt feelings, and choosing an unqualified candidate for a position of power. Not all your family members will want to be involved in the business, but starting your succession plan sooner rather than later will help you strategically prepare for family growth, allowing you to act with intentionality when relatives want to invest more of themselves within the company. It’s even more important to communicate with those potentially affected by the change in leadership about their roles moving forward in the company. Properly leveraging skill sets will give them some sense of ownership in building the family legacy, regardless of who takes over. Talk with your employees, leadership, and family about their strengths and personal goals, and how those relate to the company. Whether the best fit for your successor comes from inside the family or out, clear and honest communication will help you avoid tensions and strained relationships. An objective third party can also be an effective resource in managing these conversations. It’s important to remember that you don’t have to take on these daunting tasks alone. Enlist the help of qualified legal, tax and business counsel to help guide you through planning, communication, and eventual transition. Confidence is critical. A well-thought-out and executed process will set you, your family, and your company up for success now and for years to come.

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

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While the thought of a company leader falling ill or worse is never pleasant, there can be dire consequences for companies that do not have contingency plans in place for such events. The smooth transition of leadership within a company is vital, especially because client needs must continue to be fulfilled and employees still require direction and a leadership team that they can rely on. Lack of preparation for these situations can lead to worse case scenarios, a loss of trust among employees and management, and businesses in these situations often find themselves collapsing inward.

Succession planning has even further consequences, as job loss, company revenue, and culture are all at stake. It is possible that families could lose their livelihoods from a lack of planning ahead.

What can be done then?

At Whittier Trust, we take care to navigate taxes, funding sources, and relationships for clients in order to make the transition of succession run as smoothly as possible.

“We take a comprehensive approach to planning, which is why I think we’re so successful in what we do,” says  Elizabeth Anderson, Vice President at Whittier Trust. “It’s our company mission to help generations of families care for their significant wealth in all sorts of different family and business scenarios. Our model for succession planning is customizable, so families can choose a plan that is right for them.”

What Steps Are Necessary? 

  • Plan early. It is advised that succession planning starts at least 3-5 years before a transition. Circumstances might demand an even longer period of transition time. Consideration should be taken to minimize capital gains taxes and maximize asset protection.
  • Assemble your advisory team. Start with the basics – surround yourself with people who can help you understand the bigger picture and the complexities that business, tax, and wealth management pose. Your team should give you options that best suit your overall objectives.
  • Make a contingency plan.  Making sure your business will run smoothly in an emergency will increase trust and confidence among employees, customers, and potential buyers.
  • Identify your ideal successor.  The person you wish to name as your successor may not be the best choice. You should work with your advisory team to find the best options.
  • Plan for after.  Knowing how you’ll spend your time and what resources you will need during retirement is critical.  To estimate financial needs during retirement, you must know how and where you will be spending your time.
  • Update your personal documents.  It is crucial to meet with your tax advisor, estate planning attorney, and wealth manager before a transition of leadership. Minimizing capital gains taxes and estate taxes while maximizing asset protection and family harmony takes time and planning.
  • Prepare the business.  If you are planning an exit that you hope leads to a high sales price for your business, you may want to bring in experts to help make the company more attractive to buyers.  Making sure the company financials are clean and audit-ready involves more than just following GAAP principles.  Strategies to retain top talent, reduce risk, and add value are some of the priorities you and your advisors should tackle.

If you are planning a family transition, you should focus on the relationships with non-family employees you value the most.  Making them comfortable with the transition is critical.

  • Prepare the family. In the case of a family transition, it is best if your family understands your objectives for the business and how you want those objectives to impact the family.  Clear communication allows family members to focus on a common goal, which builds trust.
  • Consider legacy.  If exiting your business allows you to establish a desired legacy, take the time to consider it.  Share your objectives with family and others who may be carrying your mission forward, so you can be sure that they understand your motivation and have the tools to keep your legacy alive when you are no longer present to do so.

This roadmap provides an overview of several steps we advise proactive owners to undertake as they consider succession planning.

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When a family sells its business, the overlap between business and family can unearth unexpected challenges. Proactive succession planning that navigates best practices and costly pitfalls can keep both the business and the family on track. This webinar will highlight fundamental differences between preparing the business for a third-party sale and grooming it for a NextGen transition. Both approaches require time and planning to achieve the best outcomes. The paths are quite different, so knowing where your business is headed can make all the difference in the range of benefits your family receives after the transaction.

In this webinar, Whittier Trust’s Senior Vice President Matthew W. Markatos, CFA, and Vice President Elizabeth M. Anderson, CEPA, along with Family Business Magazine’s Publishing Director, David Shaw, cover the benefits and pain points of selling a family business and how waiting to prepare can be an unnecessary risk.

Whittier Trust Company and The Whittier Trust Company of Nevada, Inc. are state-chartered trust companies, which are wholly owned by Whittier Holdings, Inc., a closely held holding company. All of said companies are referred to herein, individually and collectively, as “Whittier”. The accompanying materials are provided for informational purposes only and are not intended, and should not be construed, as investment, tax or legal advice. Please consult your own investment, legal, and/or tax advisors in connection with financial decisions and before engaging in any financial transactions. These materials do not purport to be a complete statement of approaches, which may vary due to individual factors and circumstances. Although the information provided is carefully reviewed, Whittier makes no representations or warranties regarding the information provided and cannot be held responsible for any direct or incidental loss or damage resulting from applying any of the information provided. Past performance is no guarantee of future results and no investment or financial planning strategy can guarantee profit or protection against losses. These materials may not be reproduced or distributed without Whittier’s prior written consent.

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Wealth planning has a broad range of approaches depending on the needs of a client. When it comes to chronic diseases and illnesses having a specialized plan that is sure to meet all the needs takes an understanding and personalized approach.

Every situation is different, so it’s important to take into careful consideration the specialized needs of each individual and family.

Families dealing with diseases and disabilities must find methods to set aside finances to assure constant care for their loved ones, whether it’s a child with severe autism or an older family member diagnosed with Alzheimer’s a customized plan is needed. When creating the plan it’s important to note that it shouldn’t affect eligibility for government assistance or any other resources available to the family in need.

Thomas Frank, Executive Vice President and NorthernCalifornia Regional Manager at Whittier Trust says, “What’s critical is being able to understand each individual, whether it’s the client who has the illness or disability, or one of their family members.” Professionals who are called to help with this kind of plan need to be accustomed to customization and ready for whatever comes their way.

Below are key considerations for families when creating a plan for someone with illnesses or disabilities.

Personalize Your Plans

Due to each circumstance of disabilities and illnesses being unique, developing an effective strategy for people with chronic diseases or impairments can be difficult, so it’s important to know the status and potential future outcome of every situation. Things change and evolve and being adaptable is just one part of customizing a plan.

Identify A Power Of Attorney

If someone is preparing to receive a period of treatment and recovery they may want to appoint a power of attorney to help with their financial decisions while undergoing treatment. Establishing a durable power of attorney is not only helpful in situations you’re aware of but also ones you may not see coming in case they are to become disabled. Through the durable power of attorney, they can ensure decisions will be made and carried out properly. If the client is able to make decisions the power of attorney can be revoked at any given time.

A living trust is also another option, in which the trust holds the assets and a successor trustee can manage while the client may be recovering or unable to do so themselves.

Find Backup

These decisions are never easy and a client may not always be ready to make them. Frank recommends granting a family member the ability to add or remove a trustee, whether it just doesn’t work out or if the selected trustee is unable to do so.

Prepare The Trustee

To avoid distrust in a family during the difficult decisions of choosing a trustee, it is important to inform the trustee and your family so that it doesn’t come as a surprise later on. Communication throughout the entire process will instill trust within the family and everyone can be comfortable and acknowledge that the best decision is being made.

Planning applies to both permanent and temporary situations. Someone may be laid off from their job due to treatment or an accident, and they’ll need someone to step in and handle their rental properties. In such a case, having someone who has been actively involved and can aid without skipping a beat is better.

Transition times can be difficult, upholding communication throughout the entire process makes it easier on beneficiaries. It’s better to know too much than to know nothing at all. Unexpected things happen all the time and it’s crucial to have preparation ready for any situation.

Every situation is different and requires a specialized plan. Having a flexible partner on your side to help create a plan will make decision-making easy.

For more information, you can download the full report here or visit Forbes to read more.

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