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. This is where corporate trustee services come in handy. Professional business and estate planning services can help identify the first step in family estate planning. 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 corporate trustee services and estate planning services as they can provide qualified legal, tax and business counsel to help guide you through planning, communication and eventual transition. Confidence is critical in family estate planning. 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.

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

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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.

YouTube video

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.

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

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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 needs takes understanding and a personalized approach. Working with a wealth management company offering comprehensive trustee services, estate planning services and family office services can be extremely helpful. 

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 Northern California 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 these kinds of estate planning services, need to be accustomed to customization and ready for whatever comes their way. Family office services and their wholistic approach to wealth management can be especially helpful in unique circumstances. 

Our family office and estate planning experts share their 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.

This is where trustee services can be helpful. They take the burden of decision-making off the family with experience and objectivity, while providing a steady hand to help manage family dynamics and communication. 

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. Whittier Trust offers holistic trustee services, estate planning consulting and family office services to take the burden off of your shoulders. 

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

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

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Sustaining Wealth: From Myth to Reality

Inherited wealth decreases by 50% every 20 years as compared to the average American’s wealth. Every six decades, this equates to an 88 percent drop in relative income. The downfall of wealth through generations is more common than one may care to realize and happens all around us. However, it is avoidable by working with family wealth management advisors that specialize in solutions like trust services, tax management, and estate planning services.

Holistic Approach

Based on the difficult task of building wealth, family business owners and executives can overlook obstacles to maintaining what they have created. Although this can be challenging, the obstacles are not impossible to overcome. Whittier Trust has helped hundreds of families grow their wealth over generations through Whittier Trusts’ holistic approach that focuses on finances and family.

Creating a balance sheet is the first step in the unique, holistic approach. The balance sheet helps determine where things stand today and creates a snapshot of all your assets and liabilities. This provides an itemized look into your overall net worth.

Personal cash flow needs are the next step of the holistic approach. As your financial advisor, we examine your personal cash flow needs through simulations and scenarios that determine what kind of asset base is needed to support your lifestyle. The lack of an effective cash flow plan can lead to the force of selling equities during a market drawdown, making it difficult to recover for your portfolio if the market makes a rebound.

Tax investing plays an important role in sustaining the wealth of your family. The US tax codes come with specific investment behaviors and structures, so it’s important to begin aligning your investment with tax codes through comprehensive and proactive tax management. Along with tax code alignment and what assets to buy, the location of the assets is equally important. Choosing the optimal asset location can have a large impact on your after-tax returns.

The most important part of our holistic family wealth management approach is the family dynamics, where the approach begins and ends with your money. Families can be complicated at times, and these complications and conflicts only get larger with the growth of your family. Communication is key when dealing with family dynamics. When your estate plan is created, discussing it with your family and communicating the terms of the plan can suppress feelings of surprise and inequity. Family advisors and trust services are here to help and guide you through these difficult family conversations.

An approach to help reduce conflict and bring a family together is philanthropy. Each generation will likely require different needs and priorities, and philanthropy can help with any conflicting values. Along with bringing the family together, a family foundation can teach younger generations the important skill of financial literacy.

Estate Planning

Estate planning can be an effective way to sustain your family’s wealth. Through a thought-out planning process, tax liabilities can be reduced, assets will be protected and probate can be avoided, just to name a few of the benefits. Estate planning may cause you to give up control of your assets or limit the flexibility of your financial plan, but with the help of a trusted advisor and the right estate planning services, the best trade-off for you can easily be determined. Keep in mind the evolution of your estate plan and ensure it’s a living document. As times change, so should your estate plan to keep up with all of the changing trends in finances and planning.

At Whittier Trust, sustaining your family’s wealth through a holistic approach involves balancing your finances and family to provide the most effective plans and outcomes for future generations. Our family wealth management advisors can help you navigate any and all considerations through experienced trust services, tax management, estate planning services. 

For more information, you can download the full report here or visit Las Vegas Review Journal to read more.

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

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Ten years ago, Andreessen Horowitz proclaimed that “software is eating the world.”  Since then, the world has witnessed the rise of the first trillion-dollar software companies: first Apple, followed by Microsoft, Amazon, and Google.  Today, technology is woven into the fabric of every business in existence.  While technology has opened the doors to massive markets and exponential efficiency, it has also paved the way for unprecedented threats of disruption.

Every Business is a Technology Business

Regardless of the industry, every business is now a technology business.  For example, Invitation Homes, the largest owner of single-family rental homes, owes its success to proprietary software to optimize home maintenance schedules, improve energy efficiency, and better predict which neighborhoods to enter next.  Domino’s Pizza’s digital-first approach to managing its supply chain and deliveries has kept it a step ahead of competitors while also preventing third-party delivery apps from disrupting its relationship with its customers.

How to Prepare for Disruption

Be an Early Adopter

Experimenting with emerging ideas and embracing a culture of innovation will help see around the corner to where the world is going. Proctor & Gamble was among the first to experiment with advertising on TikTok, allowing them to generate over 14 billion views at a quarter of the cost of Facebook ad impressions.

If You Can’t Beat Them, Join Them

Honeywell invented the world’s fastest quantum computer and allowed for accessibility via Microsoft’s cloud, resulting in new revenue channels (customers now include DHL, Merck, & Accenture) while providing advanced analytics for Honeywell’s own business lines.

Disrupt Yourself

Be willing to incur short-term pain for long-term gain – cannibalizing existing business lines today can create opportunities tomorrow.  Toys-R-Us was unwilling to sell online because it would reduce in-store sales, allowing Amazon to capture the market.

Build a Brand

High-quality service and personal relationships can’t be replaced.  Build a relationship with your customers and focus on providing excellent customer service to prevent customers from leaving to a new competitor.  For example, Costco has the highest customer perception score of any retailer, preventing it from being swept aside in the wake of Amazon (and resulting in its stock doubling the performance of the S&P 500 Index over the last 10 years).

How to prepare for the inevitable?

It’s important to act today to be able to act quickly in the future.  Taking steps to prepare for a future sale will pay dividends not just in the form of tax savings but also in being able to take advantage of opportunities that may come your way, whether that be an unforeseen buyout offer, an acquisition opportunity, or capitalizing on prime market conditions to sell your business.

What steps can I take today if I am planning on selling a business at some point in the future?

First, Assemble a Team

Pre-sale planning requires coordinating estate planning attorneys, accountants, business advisors, family members, trust advisors, and wealth managers.  Whittier Trust acts as the quarterback for our client, seamlessly integrating your tax, estate and business advisors with our high-touch investment management, family office, client advisory, and real estate services to maximize the value of the business and protect it for the next generation.

Evaluate All the Options

There are many techniques that may be employed to minimize capital gain taxes and maximize asset protection, including:

  • Qualified Small Business Stock (QSBS) – Section 1202
    • Performed correctly, QSBS transactions can help exclude the greater of $10 million or 10 times the shareholders’ adjusted basis in gains
  • Grantor Retained Annuity Trust (GRAT)
    • While GRATs can be funded with any type of asset, the strategy works best when funded with securities that are expected to appreciate in a short period of time – such as stock in a private company that might be sold during the GRAT term
    • Today’s historically low-interest rates make GRATs especially effective
  • ESOP buyouts
    • ESOPs may allow sellers to defer capital gains
    • The selling company may receive a tax deduction equal to the purchase price through contributions to a qualified retirement plan
    • Proceeds from the sale must be invested in “qualified replacement securities” by the seller within a set period of time
  • Discounted Gifts/Sales
    • Transfers of assets where the interest being transferred lacks control and the ability to market and sell the interest may result in a valuation discount of 30-40%
    • Gifting discounted shares allows you to reduce your estate tax liability by leveraging your lifetime gift tax exclusion
  • Charitable Planning Options
    • Donations of appreciated assets can eliminate capital gains and transfer assets out of your taxable estate
    • Charitable deductions are calculated at Fair Market Value (except to private foundations, which are calculated at cost)
    • Double Benefit: Charity doesn’t pay taxes when sold in the charitable entity resulting in increased benefit, and you get a tax deduction for the donation
    • Consider donating directly to a donor-advised fund (DAF) for additional flexibility
    • Charitable Remainder Trusts provide an income stream for the grantor and a charitable deduction while benefiting a charitable cause
  • Consider the Nevada advantage
    • Unlike most states, Nevada does not have state income or capital gains taxes, resulting in a significant compounding effect on the growth of wealth
    • Nevada allows interests to be held in trust for up to 365 years, shielding future beneficiaries from tax burdens
    • Nevada law includes provisions for directed trusts, allowing an individual to place responsibility of closely-held business in the hands of a family member or business partner, while giving responsibility of the broader investment portfolio to a trustee
    • Performed correctly, Nevada is a premier state for asset protection trusts, providing protection to the seller of a business

Summary: We are living in a time of disruption.  A business climate where companies can be unprofitable for years before dominating an industry.  From software to logistics to rental homes, it is more important than ever to consider and prepare for the risks of disruption to family businesses.  Protecting the family business can come in the form of reinventing the business, forming asset protection entities, or effectively planning for a sale.

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

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Family businesses often take on various functions on behalf of individual family members, including bill paying, household management, investment management, oversight of insurance procurement, and tax and legal matters. Personal insurance and the intersect between the business and the family often remains an overlooked component of a total risk profile.

This webinar will:

  • Highlight areas of opportunity to align personal insurance with the family’s needs.
  • Provide an overview of the personal insurance marketplace.
  • Raise awareness of common areas where successful families may be vulnerable.
  • Offer insight into how asset protection strategies and entities such as trusts and LLCs can be better managed within the context of insurance.

Join Kimberly Frasca-Delaney, Senior Vice President, Client Advisor at Whittier Trust; David Beeton, Private Risk Advisor and Assistant Vice President with the Private Client Group at Willis Towers Watson; and David Shaw, Publishing Director, Family Business Magazine, for a discussion of how families can use personal lines of insurance as a first line of defense.

This webinar is sponsored by Whittier Trust & Family Business Magazine.

YouTube video
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.

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

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A common misconception is that people with significant wealth spend their time as they please. But high-net-worth families rarely have as much free time as people believe. Whether they’re running a business, overseeing an investment portfolio or managing several households, life can be complex and busy. A family office, unlike a traditional financial advisor, can take a holistic approach to their financial and personal life. The result: more time to spend with family or commit to philanthropic interests. In short, they gain more personal time.

“Many people think a family office is like a trust department of a bank, but a family office provides much more than investment management or trust services,” said Lisa Edwards, a senior vice president and client advisor in the South Pasadena, California office of Whittier Trust. “A family office functions like a financial concierge and can do as little or as much as our clients want.”

At Whittier, each advisor has a maximum of 20 client relationships, said Edwards. That allows each family to receive the customized service and attention they prefer. While each has investable assets in excess of $10 million, no two clients are alike.

Creating significant wealth requires a lot of work, said Edwards, but staying wealthy takes lots of work, too. A family office can lighten that workload.

Financial Freedom and Time Management

Each of Edwards’ clients has a different approach to what they want the family office to provide. In one case, a patriarch who generated wealth for his children and grandchildren has a quarterly meeting with Edwards and a team of advisors to review all aspects of his investments and legacy planning.

“He has a strong philosophy about his finances and his legacy,” she said. “We provide him with a comprehensive notebook that he keeps for his own reference, but we take the day-to-day burden off him so he can do what he wants with his time.”

In this case, he is deeply involved with youth programs that he founded and has spent more time with family.

“One client texts us a couple of times a month to bounce investment ideas off of us,” said Edwards. “We’re ready to respond in a holistic way because we know his goals and his other investments, his risk tolerance and his lifestyle.”

How much help clients want often changes as the relationship grows. The family office can handle an array of services, including bill paying, asset management, estate and tax planning and philanthropic activities. As clients grow more comfortable with the firm, they often seek out additional services.

“There’s usually one point of entry, such as someone comes to us and says, ‘We want to start a foundation’–or they have a $20 million investment and they want us to take over just that investment account while they manage the rest,” said Edwards.

Support for Business and Philanthropy

A family office can provide succession planning help or establish a philanthropic foundation.

For example, one of Edwards’ clients with a successful closely-held business decided to avoid potential family conflict by developing a succession plan with the current company’s executive team.

“We serve on the board so we know the company intimately and we can help reinforce the management team, which doesn’t include family members,” said Edwards.

In other cases, family members may be part of the business’s succession plan. Either way, the family office’s intimate knowledge of the business and people involved allows advisors to coach and prepare everyone for the future.

For another client, the matriarch wanted to take the reins of the family foundation. Edwards and her team of advisors established the nuts-and-bolts of the foundation and provided coaching in foundation management and leadership for all the family members on the board of the organization. “We took them from ‘deer in the headlights’ to a cohesive, well-informed team of advisors, one of my proudest accomplishments.”

Manager of Managers

Whittier Trust advisors and their clients have access to an extensive network of experts in investing, real estate, insurance and estate planning. In addition, many of their clients have assets managed or custodied with other companies.

“Our role may be to be the manager of their managers,” said Edwards. “If we put all the information together from a grand scale, we can prevent a family from having too many of your assets allocated in one single industry or even a single stock. We can look at asset diversification across all their managers to ensure it ties to the family’s investment objectives.”

Based on this information, the firm creates holistic reports that blend accounts from different managers. Most people are hesitant at first to turn over their whole financial world to one company, which is why it can take years for the relationship to develop. The neutrality of Whittier helps build trust.

Services For Multiple Generations

Sustaining wealth through multiple generations is a primary goal for high-net-worth families, and one that a family office can support.

“A huge benefit for families is the consistency and seamlessness we provide to preserve wealth for the next generation,” said Edwards.

“Financial literacy is provided individually to prepare heirs to handle their wealth and at family meetings to generate dialogue between older and younger generations, particularly to explain the parents’ philosophy to the next generation,” said Edwards.

“We strive to find a different, perhaps younger client advisor in the firm to work with the younger generation, so they have their own advocate and can establish their own relationship,” she said. “That way, the person has their own identity and confidentiality, but the advisors can work cohesively so there aren’t conflicting messages or something that would be adverse to the portfolio.”

For example, the son of one of Edwards’ clients is interested in real estate.

“He sent us a deal that he’s looking at, and we took it to our real estate department to vet it,” said Edwards. “We were able to tell him what we see that’s good and bad about the deal to talk him through that, as opposed to just handing him a check.” He is also learning about debt financing and structuring the ownership entity for maximum tax-efficiency and liability protection.

The freedom that comes with a family office allows her clients to focus on other pursuits, worry free. “I guess you might say we give them the confidence to have peace of mind,” said Edwards.

Written in partnership with Forbes BrandVoice.

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

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While most financial institutions provide expertise around money matters, few can provide the completely personal services of a family office—much less help someone with a longing for a llama. Dedicated family wealth management goes beyond just experienced family office investment management, and our wealth management advisors understand that. 

“We ask our clients what they’re passionate about, and one woman told us that since she was 9 years old, she wanted to own a llama,” said Tim McCarthy, managing director of business development for the South Pasadena office of Whittier Trust.

After more than a year of research, McCarthy and other experts at Whittier, a wealth management and investment firm, determined there were a few cities where it would be legal to own a llama, which is identified as an exotic animal.

“I relayed to our client that if she really wanted a llama, she would need to move to a city that permitted them. My client told me she was willing to move, so we helped her buy a house and sell her previous house,” said McCarthy. “The day of the closing, I called to let her know she could get her llama, and she told me three were being delivered that day.”

Whether it helps clients navigate a career change, mitigate family quarrels or negotiate a lease for a new business, a family office does far more than just pay the bills.

“Our work always starts with the money and ends with the family,” said McCarthy.

The Multifunctional Family Office

There’s no universal description of what a family office does, said McCarthy, in part because the services vary by client. Bookkeeping, bill paying and ancillary financial services are commonly thought of as family office services, but McCarthy said his office of wealth management advisors, which serves as a “multifamily office, provides a much more robust and comprehensive function.”

As a family wealth management office, they have experts in all financial matters including trusts, investments, insurance, real estate and philanthropy. If they lack expertise in anything, they will track down the appropriate source of information for their clients.

“We take a holistic approach to your entire life,” said McCarthy. “We look at your financial balance sheet, your assets and your liabilities, but we get more involved with your life balance sheet. We talk about priceless things that matter to you—like your spouse, your kids, your grandkids, educating your kids and grandkids, your reputation and your health.”

A true family office, said McCarthy, is skilled at the nuances of protecting and building on those life balance sheet assets.

Those with $10 million or more in investible assets probably have accounting and investing services in place, but often experience only cookie-cutter solutions. A family office, and family office investment management, meanwhile, “provides you a blank sheet of paper to decide where you want to go,” he added. “We spend our time focused on your plan, the way you want it. Part of that effort is perpetuating your culture and values on to future generations, and part of it is mitigating the unintended consequences of life that all of us experience at one point or another.”

Those goals can include things like legacy planning or teaching your kids to be good stewards of wealth.

Personalized Services

The history of Whittier Trust and its experience with more than 440 high-net-worth families informs the advisors as they deliver customized services.

“We know how to reduce the unintended consequences of wealth,” said McCarthy. “We’ve heard our families say, ‘We don’t want wealth to tear the family apart.'”

Because advisors become very familiar with the families they serve, they can be proactive as well as reactive when a family member needs help with almost anything. For example, Whittier can establish a family governance plan to avoid future potential issues with in-laws as the children become adults. Advisors have helped the adult children of their clients choose a health insurance policy, evaluate real estate and even handle the aftermath of a car accident.

While multigenerational families are among its clients, Whittier also works with individuals and couples to handle the day-to-day minutia of owning real estate or any task they prefer to outsource.

“If something is keeping you up at night, we’re the first call you should make, even if it’s not a financial issue,” said McCarthy. “The majority of our business is not financial. If your kids don’t get along or your grandkids are struggling to reach potential, we have experience with a broad range of client types.”

While most clients start working with Whittier for investment management, most utilize other services within 60 months or less, according to McCarthy.

Wealth management advisors, for instance, can look at the numbers to help someone decide if they should lease or buy a car, give them advice on business succession or discuss family governance.

Preserving Wealth Through A Holistic Approach

The holistic approach that a family office, and family office investment management, takes helps clients not only build wealth—but also identify ways to spend less or generate income that contributes to the family’s success. A family office like Whittier, which doesn’t sell investment products or insurance, can do a comprehensive study of their clients’ policies, portfolios and assets to make recommendations that are in their clients’ best interest.

One family, for example, was able to reduce their spending on insurance while increasing their benefits thanks to our family wealth management, said McCarthy. Others improve their real estate holdings with the help of experts who can renegotiate leases and recommend which properties to sell and buy. The company’s tax experts can help families manage their portfolios to reduce their tax liability.

While building a legacy can be exciting and exhilarating, a family office to manage and preserve that money for family and for philanthropic purposes can be an invaluable source of support that goes way beyond bookkeeping. 

Written in partnership with Forbes BrandVoice.

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