Bringing the philanthropic goals of the past and present generations together 

Many Whittier Trust clients have a family foundation that has been in existence for multiple generations. The foundation may have been set up by great-great-great grandparents who determined its mission and values. Fast forward three or four generations and a lot has changed. The Whittier Philanthropy team’s goal is to provide continuity for the original mission and values while engaging the current generation in the family’s overall giving legacy. The following are a few ways to accomplish this.

Facilitating Clear Communication

It’s not unusual for multigenerational families to encounter differences of opinion on philanthropic choices for their family foundation. Unfortunately, a conversation between generations with differing viewpoints may turn argumentative on its own. This is where Whittier brings value as an outside, neutral party. 

“We often work with all family members on the common goal of making sure all voices are heard and valued and at the same time perpetuating the mission of the foundation,” says Haley Kirk, CAP®, vice president and client advisor for Whittier Trust’s Philanthropic Services, who explains that her team always starts with educating the whole family on the history of the foundation and its mission.

“We can have one-on-one conversations with each family member so that everyone feels that they are given the opportunity to speak freely,” she adds. “We listen to individual opinions and then work them into conversations with other family members.”

In addition to conversations, the Whittier Trust Philanthropic Services team recommends establishing a family website as a good practice for clear communication. The site can feature the history of the family, how they came into wealth, the mission of the foundation and the causes it is supporting.  

Engaging and Aligning Interests with Causes

Parents might be uncertain how to pass their philanthropic interests on to their children and how they can support their kids in finding their own charitable passions that still align with their own. “Because the majority of foundations have the goal of lasting in perpetuity, it is imperative that we involve and prepare the next generation,” Kirk says.  

While philanthropic goals may vary from person to person, Whittier works with parents and their adult or adolescent children to find the common root. For instance, one current hot topic is climate change and a hypothetical example is a family where the parents don’t believe in climate change yet their children feel passionately about helping the environment. “Perhaps because of weather changes, animals are suffering and the family can all agree to help animals, so the grant could be to combat that issue and not specifically focused on climate change,” Kirk says.

Developing a Foundation Associate Board

The development of an associate board when family members reach a designated age is a great way to involve the younger generation in a family foundation. The Whittier team encourages boards to create younger advisory boards that are allotted a small amount of money to give away as a group. “It is an opportunity for them to pick a cause they care about and present it to their family, and gain life skills like public speaking and presenting, research and fact-gathering, and financial evaluation, in addition to supporting something they are passionate about,” says Kirk. 

Preparing to Hand Over the Baton

At some point, it’s time to get adult kids more involved to ensure the continuation of the foundation. This was the case for a Whittier client where the older generation (mom and dad) were running the foundation without their four grown children’s involvement. A strong-willed person, the mother didn’t have faith in the kids to follow what she wanted to do with the foundation. 

“We encouraged the parents to invite their kids to start listening in on board conversations,” Kirk says. Before the first board meeting, however, the parents had a scheduling conflict. “Instead of rescheduling the meeting, we suggested that it move forward and see how the kids would do on their own.”

The result was that the younger generation were very focused on choosing grantees that fit within the foundation’s mission. “It was pretty special.  Seeing that the kids hadn’t spun out in an entirely new direction inspired trust; the parents were able to feel more relaxed about the idea of sharing control with them and one day turning over the reins completely.”  

Sometimes all it takes for families struggling to bring the philanthropic goals of the past and present generations together is some outside guidance and support to get started on the right foot.

What an executive director needs for success behind-the-scenes

Oftentimes families appoint a family member to be the executive director of their foundation. This is perfectly legal and makes sense, as that person can be the voice of the family, promote the mission of the foundation within the community and surface appropriate grantmaking opportunities as part of their job. However, there are several administrative duties that must be performed, some complex, which the family might not know about or in which the executive director might not be well-versed. Additionally, as a foundation grows, there are other considerations.

One example is the story of the English family who came to Whittier Trust after its matriarch had passed away. She had been running the family’s foundation and decided to appoint her granddaughter to the executive director position before her passing. The granddaughter, along with the other family board members, were managing a relatively small foundation of around $3 million. However, upon the grandmother’s death, the majority of her estate was left to the foundation. The foundation now had a much larger annual payout requirement to meet and the family was feeling a bit overwhelmed. They wanted to make sure they were in compliance with all applicable regulatory requirements and wanted to take a more sophisticated approach to the foundation’s investments.

Whittier Trust helped the English family to establish an investment policy statement, diversify their portfolio and align their investments with their values. They also took over several key back-office tasks to set the executive director up for success so that she could continue doing what she does best: representing the foundation in the community and focusing on its philanthropic strategy.

Bookkeeping and Accounting

Keeping the books in order can be a large undertaking. “Whittier Trust takes this off the executive director’s shoulders by preparing quarterly and annual financial statements for the foundation, issuing checks and maintaining the files needed for tax preparation and audit purposes,” says Haley Kirk, CAP, vice president and client advisor for Whittier Trust’s Philanthropic Services.

Preparing Grant Agreements

When an executive director or one of their family members comes across a nonprofit they’d like to support, Whittier Trust can handle the administrative work to review the organization. It was vital for the English family’s executive director to be involved in the community and to support her family’s mission. Instead of being bogged down by back-office work, such as preparing grant agreements, her time is primarily spent meeting with nonprofits learning about what they want to do and their goals. “For example, she’ll send me an email that says she wants to grant $30,000 over 3 years, and ‘Haley, please compile the needed details and grant file to complete the donation,’” says Kirk. “And we get it done.”

From there, Kirk’s team interfaces with the nonprofit to collect the EIN, run a charity check to make sure it can qualify for the grant, get their contact information and create the grant agreement, which may include a grant report requirement. As the date of the report nears, they make a phone call to remind the charity about the report’s deadline. When the next grant is due to the nonprofit, they reach out to the executive director to keep her up to date, as well as send the check. What’s more, Whittier can facilitate multi-year grants and schedule and monitor any subsequent grant reports that the family would like to see.

Tax Preparation

In addition to handling bookkeeping and accounting, Whittier interfaces with the foundation’s CPA to provide any documents needed for tax preparation. 

If a California-based private foundation or charitable trust earns or receives over $2 million annually, it is required to have an audit the following year. “It can be hard to track that number so we keep an eye on the $2 million threshold for our clients,” says Kirk. “If the foundation requires an audit, Whittier then works with the auditors.”

In the case of the English family’s grandmother’s estate, part of the money came in shortly after her passing, then a larger sum arrived. “They might not have realized that they were going over the audit threshold but we could see that on our end. Because the books were clean and up to date, everything was on track for the audit and the executive director and family Board members did not have to worry,” Kirk explains.

Board Meeting Facilitation

Corporate foundations are required by law to have one board meeting every year. “The team at Whittier Trust can stay on top of this so that it doesn’t become a cumbersome process,” Kirk says. This includes all of the logistical planning, such as scheduling the event with multiple parties; preparing the materials, such as proposals, financials and reports for review at the meeting; and taking meeting minutes so the executive director can focus on leading the meeting.

Central Office Funnel

All mail can run through Whittier Trust, which can serve as the central office for a foundation. Using Whittier’s address rather than the family’s reduces the burden on the executive director to triage all that mail. “We can screen out requests that aren’t a fit with the foundation’s mission or guidelines and politely decline them on behalf of the family,” Kirk says.

Initially, the English family was concerned that by giving Whittier the reins to take over the foundation’s administration they would lose some control and not be able to do what they wanted. It ended up being the opposite. Without the burden of administrative tasks, the executive director can now spend more time as the public face of the foundation, which means attending more events and meeting with nonprofits.  Partnering with Whittier Trust has allowed her to thrive and alleviates the worry of liability due to a misstep along the way.

Sep 27th

Our View

The Policy Path Ahead

It is rare to see two consecutive weekly declines of –5% in the stock market. We have unfortunately witnessed this negative outcome in the last two weeks. And sentiment remains bearish through this week as well.

We share some thoughts on the –11% decline in the S&P 500 index since September 12. We focus on 3 events that have catalyzed the most recent decline in stock prices – the August inflation report, the September Fed announcement and the surprise fiscal stimulus from the U.K. government.

The Fed

Markets were initially jolted when CPI inflation data for August surprised to the upside. On September 13, headline inflation came in at 8.3% instead of 8% and core inflation rose by 6.3% instead of 6%. Core inflation also showed a monthly gain of 0.6% instead of the consensus 0.3% expectation.

The higher-than-expected inflation data increased the odds of larger and more frequent rate hikes from the Fed. As much as investors may have geared up for a hawkish Fed, they were still taken aback by the tough Fed policy message on September 21.

The Fed projected that short term rates would rise to 4.4% by the end of 2022 and 4.6% by the end of 2023. And they expect their favored inflation metric to subside to almost 5.5% by year-end 2022, then to around 3% by 2023 and to just above 2% by 2024.

The Fed projections themselves were not too different from market expectations. For example, the market had priced in short rates of around 4.5% next year; the Fed was just a touch higher at 4.6%.

But what may have caught the markets by surprise was the Fed’s ultra-hawkish tone in continuing to fight inflation at any cost. The Fed essentially committed to an additional 150 basis points of rate hikes in the coming months without due regard to “data-dependency”. In the process, the Fed came across as prescriptive and mechanical as opposed to thoughtful and deliberate.

The U.K. Government

The new U.K. government announced a sweeping program of tax cuts and investment incentives on September 23 to boost the country’s faltering economic growth. However, the proposed plan set off several unintended consequences that now pose a greater risk to global markets.

A “loose fiscal, tight monetary” policy has historically led to weaker asset prices. The currency and bond markets in particular reacted violently to the misguided fiscal stimulus in the face of already rampant inflation.

The British pound declined sharply to record lows as investors worried about even higher inflation. The increase in the debt burden also sent long term bond yields to well above 4%.

The combination of the Fed’s hawkish posture and the U.K. fiscal plan sent the dollar soaring by 4%, the 2-year bond yield higher by 30 basis points and the 10-year bond yield climbing by 50 basis points to almost 4%.

The Outlook

The parabolic rise in the dollar and global interest rates create additional risks to the global economy. We assess them in the following framework.

  1. Given the growing evidence of a global slowdown and cooling inflation in the U.S., the Fed may now be approaching a stage of raising rates “too far too fast for too long”. We believe that a rigid and inflexible approach to continued tightening by the Fed may not be optimal.
  2. We advocate an impactful but yet measured and flexible policy path forward. We believe that inflation has peaked and is slowing down meaningfully to afford the Fed enough flexibility in the pace and frequency of future rate hikes.
  3. Our view on inflation peaking and now subsiding is supported by several metrics – copper, lumber, gasoline, house prices, mortgage rates, rents, tax receipts.
  4. Absent a shift in positioning, the risk of a Fed policy misstep is now higher. We believe it will eventually be avoided.
  5. We believe the sharp rise in long term U.S. bond yields is unsustainable especially in the face of declining inflation and demand destruction. Lower bond yields will likely help ease the strain on growth and valuations.
  6. Future rate hikes from the Fed will likely continue to slow growth and increase the magnitude and duration of a potential economic and earnings recession.
  7. The increased odds of a recession are already reflected in the new lows that have been created in the stock market this week.
  8. Unless the Fed blunders into a major mistake, we do not expect a deep and protracted recession or a lengthy bear market.
  9. We continue to hold existing equity exposure, slowly deploy un-invested cash into growth assets in public and private markets and explore ways to create tax alpha from tax loss harvesting.

These are extraordinary times of change, challenge and chaos. We stand ready to help you navigate this unusually high market volatility.

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.” 

The market turmoil in 2022 so far is in sharp contrast to the heady mix of stimulative policy and low volatility in 2021. In 2022, persistently high inflation has led to tighter monetary policy and slower growth.

As a long cycle of easy money draws to an end, we discuss several implications of a more normalized regime of inflation, interest rates, and valuations.

In the short term …

  • Have we just seen that elusive peak in inflation or will the data flatten to deceive?
  • How far behind is the Fed in its tightening cycle and how far does it need to go from here?
  • Are we in a recession now?  If not, when will it arrive and how long will it last?
  • How severe and protracted will the bear market be for stocks and other risky assets?

There are even more intriguing questions on the other side of this economic slowdown.

In the longer run …

  • Where will inflation and interest rates eventually settle?
  • What will stock and bond returns look like?

These are extraordinary times of change, challenge and chaos. We hope these insights help our readers navigate this unusually high market volatility.

YouTube video

By Whittier Trust

It’s nearly impossible to turn on the television or read an economic journal without being confronted with news about stock market volatility, inflation and the possibility of rising interest rates. Ultimately, market factors are always in play. Economies, and the components that make them up, are always fluid.  

“While interest rate hikes during the first six months of 2022 have affected our ability to buy properties, the fundamentals of the properties haven't changed much,” says Whittier Trust Senior Vice President of Real Estate Juliana Ricks, who advocates a long-term approach to real estate investing. “We're still finding quality properties that we like and ones we feel could ride out any cycle in terms of valuation.” Here are some of the reasons why a long-term approach is a winning strategy for real estate investing. 

A Good Buy

As with any potential investment, vetting every element of not only the property itself but also the environment around it can help predict whether the investment will pay off in the long run. 

When Whittier Trust’s real estate division evaluates a new piece of multi-family real estate in which to invest, they are looking for population growth and job growth over time. While any location is open for consideration, Whittier tends to be most focused on major cities that have a long-term track record, as opposed to small towns with sudden surges. “We want to be invested in places that we think will do well over a long period. It’s less speculative,” Ricks says, which can translate into more secure investments for Whittier Trust’s clients. 

Although the team looks at all property types, most of Whittier Trust’s recent investments have been in multifamily properties. Since the three to five real estate investments each year involve between $15M and $20M in client equity, their team investigates whether rents are increasing in the market and occupancy rates and demand for housing are high. Whittier Trust’s investment group becomes the sole limited partner, holding 95% of a project’s equity, while an operating partner familiar with the market and property type typically holds a 5-10% investment and the responsibility of the day-to-day management. Key elements are investigated and evaluated to determine whether or not a project has the potential to be a smart long-term investment. 

Patience for the Long-Haul

When Whittier Trust embarks on a new real estate investment, they generally look at investments on a 10 to 12 year horizon, although they would sell sooner if a great opportunity comes along. It’s a vastly different approach than the goal of making a quick return or planning to “flip” a property. “Within that range, there will likely be an opportunity to have a good outcome for the asset. That sort of staying power in real estate is important because it allows us to ride out the economic cycles,” Ricks explains. 

With housing costs—both for single-family homes and rents—on the rise across the United States and interest rates climbing, it’s vital to look toward markets that have a proven track record. “While everything's fair game, there are certain markets that have fared better [during economic downturns]. We certainly think about which markets would be okay if there were a down cycle,” Ricks says. Even with some market volatility, planning to hold onto a piece of real estate for a decade or more gives the investment time to produce solid returns for Whittier’s clients. 

Interest Rates’ Impact on Real Estate Investing 

As any real estate investor knows, a property is worth what someone is willing to pay for it. However, during a period of ultra-low interest rates, buyers could afford to pay more for properties in some cases. That’s changing as interest rates rise, and it requires a nuanced approach to get the best result for Whittier Trust clients. 

“We're at a certain place in terms of valuation based on cap rates,” Ricks explains, adding that interest rates have increased by two full percentage points since the beginning of 2022. “Valuations haven’t necessarily gone down as quickly. Interest rates are significantly higher than the cap rates on many properties, which means that the unlevered yield would be lower than the interest you're paying. You're back in this position where you're having to fund debt service initially, as the property stabilizes.” 

Whittier Trust’s Real Estate division looks for investments that are both solid buys and growth opportunities, with the objective to generate lucrative returns, even in the face of interest rate fluctuations.  And, should interest rates drop over the life of a property, refinancing for a more advantageous position is possible. 

Building a Legacy 

This long-term approach perfectly aligns with one of Whittier Trust’s core focuses: legacy-building by passing wealth intergenerationally. “We know that there is staying power in real estate. If you can hold on to assets, historically they tend to recover their value” Ricks says.  

Approaching real estate investments conservatively so that they will perform well over time includes going back to basics to make sure the fundamentals are solid, choosing a good location, partnering with top-notch management and not putting too much debt on the property. By the time Whittier Trust closes any deal, “we've researched the market to understand the conditions that will make the property perform well,” Ricks says.

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.

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