Post Type: White Papers

Dec 9th

Family Estate Planning: Keeping Your Family Business Legacy

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.

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Oct 13th

Philanthropy and Impact Investing: A Perfect Match

Philanthropy is the heartbeat of wealth management. It gives investors a chance to align their wealth and their values for a positive impact while furthering the long-term goals they envision for themselves. However, traditionally, only a relatively small percentage of charitable assets available to investors are actually given in service of donor-advised funds, grant-making or establishing foundations. The majority of assets are invested for preservation and growth, and don’t always align with the investor’s overall mission-oriented goals. Because of this, philanthropists are asking: “Is there a way we can put our investments to work on behalf of our charitable mission as well?” The answer is a resounding yes. Not only are there many ways to view impact investing, but making a difference doesn’t have to mean sacrificing returns.

Our Philosophy – It’s All About You

The values of our clients are as unique as our clients themselves, and each philanthropic goal is equally deserving of a unique investment plan. At Whittier Trust, we’ve developed a process to help our private clients maintain the maximum flexibility necessary to handpick the investments right for them and their charitable giving vehicles. This includes: avoiding mutual funds, focusing on quality investments, measuring those investments against the clients’ prioritized ESG (Environmental, Social, Governance) factors, and customizing a portfolio of recommendations for careful consideration. Examples of our tailored ESG solutions include investments in impact-screened equities, program and mission related investments (PRI’s and MRIs), fixed income, venture capital and other private investments. By looking at companies through an ESG (or impact) lens, not only are you aligning your portfolio with your philanthropic values, but because you will be looking at investments that mitigate risks, reduce taxes, and ensure long-term sustainability, you will also be growing your assets (including those used for grant-making) over time.

Our Process

Thanks to the increased presence of ESG in the markets, we have also expanded our fundamental analysis to provide metrics that demonstrate the real impacts your investments are having as a result of our process. With decades of experience, a high-quality investment philosophy, and an eye towards principles of sustainability, we know that the best way to begin this process is by listening carefully to you. Once we understand your values and how you’d like to express them through your investments, we will build a uniquely tailored portfolio to align with these values and goals. Our traditional rigorous financial analysis, known for uncovering excellent private and public market opportunities, is complimented with a layer of diligence focusing on environmental, social and corporate governance considerations.

We give these considerations equally rigorous treatment. When looking at environmental factors, we analyze a company’s commitment to energy efficiencies, recycling, minimally invasive manufacturing processes, responsible sourcing for raw materials, supply chain sustainability and deference to natural resources and environmental effects. We pay attention to how a company treats their employees, measuring social responsibility through reported levels of satisfaction and low client and employee turnover. We also look at governance. Quality of leadership and management shows through in high scores on integrity, diversity, accountability to investors and community engagement.

Is Impact Investing Right For You?

Investors are at the forefront of corporate change. We can help you join their ranks to address issues like climate change, diversity, human rights and animal cruelty. It’s up to you to ultimately determine for yourself whether impact investing is right for your money and your mission. Whittier Trust Client Advisors are here for any questions you may have, and ready to show you how impact investing can be successfully integrated into  your investing strategy.

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Sep 27th

Successful Succession Planning

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

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

What can be done then?

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

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

What Steps Are Necessary? 

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

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

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

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

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Sep 13th

Top Considerations When Investing in a Unique Asset Class

The term alternative investment may sound odd at first, but it is simply any investment outside traditional asset classes which include stocks, bonds and cash. Alternative investments may include a venture capital firm investing in a biotech startup or owning interest in a professional sports team. The practice is much more common than you may think, with approximately 45% of wealth managers investing client money in these unique assets.

Below are outlined three major considerations one should take before investing in alternative investments.

A Value-Add Tool

Perhaps the most obvious reason that people invest their money is to increase the value of their portfolios and build upon their wealth goals. With alternative investments, advisors are able to individually tailor client needs and find investments that may not exist in traditional public offerings. Alternative investments make things like adjusting or improving risk levels, diversifying portfolios and bringing social and environmental considerations into view much more simple.

For example, if a client priority included increasing expected returns of an equity allocation, an advisor might consider investing in venture capital to do so more efficiently.

Access Matters

Before jumping into alternative investments, it is important to be aware of the disparity in performance between different advisors and fund managers. Investing requires a lot of trust, especially as it involves someone else managing your money. Thus it is important to be informed and choose your advisors carefully.

While top managers are able to outperform traditional public markets, less experienced managers will often underperform. Much of investing success depends on the advisor’s ability to pick the right manager and investment. This is especially important in venture capital, where top tier managers most often produce the best funds.

Alternatives are not Mythical Creatures

Alternative investments are not a secret special form of investing. These types of investments follow the same rules of the game as any other investment. This means that economic growth and decline, as well as public debt levels and interest rates are all factors that can impact these alternatives. Taking this into account, wealth advisors must be careful not to oversaturate portfolios with too many investments that may be impacted by the same external economic risks. Even within alternative investments, advisors should be diversifying portfolios.

Finally, a question of complexity arises, as alternative investments can become the cause of a conflict of interest between client and advisor. Because alternatives are much more complex than traditional investment forms, there can be short-term gains and expense fees that come into play. It is important to have an advisor that can weigh these outcomes and choose the most appropriate course of action.

Alternative investments can be a great way to further your portfolio’s goals by offering better returns and diversification. One must keep in mind, however, that market risks are still a factor of consideration, and that much of investment success depends upon the advisor and manager that you choose. It is vital that the wealth advisor you work with is unconflicted and can determine the costs and benefits of these investments in a way that leads to your financial success.

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Aug 31st

Best Investment Options: The Compounding Power of High Quality Stocks

Investing is a delicate process that takes many different factors into account. The main goal in investing, however, is to pick the right stock, which is easier said than done. For example, if you were tasked with picking between car manufacturer General Motor’s (GM) stock and aftermarket car parts O’Reilly Auto Parts (ORLY) stock in 2013, the “high growth”, cheaper, All-American GM pick might have seemed more attractive than ORLY, which was more expensive and had slow, steady growth. The reality, however, is that O’Reilly’s shares have grown 327% since 2013, while GM’s shares have only grown 44%. The Implication? O’Reilly was a high-quality stock, while GM was not.

Choosing high-quality stocks can be difficult, as the best investment options are often hidden in plain sight due to the fact that they are neither “growth” nor “value” stocks, categories often attributed to success in the landscape of financial investments.

How then, can we define these high-quality stocks? Our wealth investment management experts say it’s important to take two factors into consideration: profitability and consistency.

Profitability

It is profitability, rather than growth, which determines a high-quality stock. Fast-growing companies can be profitable in the short term, but these gains can be deceiving and often leave investors unsatisfied when the company turns out to be unprofitable in the long term.

Profitability is most easily determined by a company’s operating margins. Revisiting our car example above, GM’s operating margins in 2013 were only 2.5%, while O’Reilly’s operating margins were much higher at 15%. O’Reilly’s high margins can be attributed to its position within the “big four” of aftermarket automotive parts. GM on the other hand is just one player within an industry containing dozens of car manufacturers, and its lower profitability clearly reflects this.

Another method of determining stock profitability is by examining a company’s return on invested capital (ROIC). ROIC is a great way to predict a stock’s ability to compound as it allows investors to understand the rate at which a company generates returns based on total debt and equity given by investors. For context, GM’s ROIC in 2013 was 6%, while O’Reilly’s was 22%: almost 4 times the rate of GM. This ultimately means that O’Reilly has more cash on hand to grow its business and reinvest.

Consistency 

The second factor which defines high-quality stocks is consistency, which is sometimes overlooked in favor of “high-value” stocks. For O’Reilly, which sells aftermarket car parts, the demand for such parts is fairly consistent regardless of economic conditions – e.i. cars will continue to break down no matter what. In the investing world, consistency leads to stability, allowing investors to hold on to their ORLY stocks for long periods of time with relatively low worry. Furthermore, this stability gives investors much more freedom and flexibility when it comes to selling decisions and tax rates. For example, investors that hold onto high-quality stocks can wait until they retire to sell the stock, resulting in them paying lower capital gains tax within a lower tax bracket.

Furthermore, with stocks that participate in buybacks, such as O’Reilly, investors can choose to donate their shares to charity, or even hold their shares until death. Both of these circumvent the need to pay taxes on the investment and can be highly beneficial to investors.

To summarize, by combining profitability and consistency factors with patience, investors have the best opportunity to compound their wealth over the long term. While these factors may seem boring or obvious, our wealth investment management experts indicate that taking them into account when choosing financial investments can have incredible results, as seen with our example of O’Reilly and GM. Adding diversified high-quality stocks to one’s portfolio is amongst the best investment options to consider, as these stocks are the basis for achieving maximized long-term returns, and should under no circumstance be overlooked.

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Aug 18th

5 Intangible Assets You Get By Working with a Wealth Management Firm

While high-net-worth individuals are no strangers to hard work, they may find that their time and talent are busy maintaining a complicated portfolio rather than working towards the passions that got them where they are in the first place.

Many high-net-worth individuals don’t see the value or advantages of working with a private wealth management firm, but it allows you to work with someone who is just as capable and competent to ensure everything is properly carried out, along with allowing you to claim back some much-needed assets.

Time

Working with a wealth management firm allows individuals to partner with a like-minded professional, with the opportunity to still provide any given amount of oversight. “People we work with may be working twelve hours a day and flying all over the place, and they can’t seem to get enough time,” says Brian Bissell, Senior Vice President at Whittier Trust. This allows people to get some time back and allocate it to other things like interests or family matters.

Family

Bissel says that estate plans can put a strain on families. By working with a wealth management firm you and your family will have fewer worries, leaving less room for dysfunction over estate planning and asset allocation. It will also ensure that beneficiaries are properly planned out and are good stewards of your family’s wealth.

Legacy

It’s also vital to keep in mind that these objectives may be unrelated to money.  “People don’t often think about what they want their legacy to be, especially when they’re in wealth accumulation mode,” says Bissell. Figuring out what matters to you now is an important step in the foundation of your wealth planning strategy.

While you may already donate to particular organizations, engaging with a wealth management expert can assist you in developing a gifting strategy that works for you now and in the future. Looking at your portfolio through a tax perspective for assets to give. This can include making a charitable trust or DonorAdvised Fund to maximize your benefits.

Having a neutral third party when making decisions regarding balancing gifting wishes from your heirs’ expectations, can make the process easier and less biased. Whittier Trust offers a holistic approach that aims to “bridging the communication gap with the next generation.” In taking this approach passing things down from generations and sharing charitable passions becomes an easy and open conversion.

Education

It takes time to navigate taxes and strategize for asset preservation, and failing to do so might result in huge tax payments. Bissel suggests that “Clients may not be aware of all the wealth preservation strategies available to them, especially when they’re still in growth mode and retirement is years on the horizon. But planning for the future well before retirement, the transition of a family business or the sale of highly-appreciated assets gives clients maximum flexibility.”

An irrevocable life insurance trust, for example, can be used to satisfy an estate tax debt. However, if you wait until your retirement years to start putting together an estate plan, securing insurance may be difficult. Working with a wealth management firm now can implement estate planning strategies before you even need them.

Peace of Mind

According to Bissell, the appropriate adviser can provide you a complete view of your money, giving you more confidence that your strategy represents your goals rather than a jumble of ill-advised assets.

“We all know the headache of gathering information for your CPA at tax time—the litany of hoops you have to jump through to secure the right documents. Your W-2, brokerage statements, charitable deductions, 1099’s from this place and that place. It’s maddening,” he says. These issues typically occur when working in a large team of advisors who lack communication, leading to investments at cross-purposes. We’ve witnessed several instances of inadvertently infringing wash sale laws, or worse, over-allocating to Wall Street darlings, putting you in danger.

A wealth management team may also handle the administrative details, enabling the client to concentrate on the big picture. Working with a financial manager can help with your family dynamic by handling necessary bills and other paperwork. With newfound flexibility after working with a wealth management firm, you can collaborate when you choose and get back some much-needed freedom, without wealth problems taking over your life.

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

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Jun 29th

Top Estate Planning Tips for Those Nearing Tax Exemption Limits

Death and Taxes are two certainties in life, but specific details are lacking leaving them uncertain. The current estate tax exemption is sitting at $11.7 million for singles and $23.4 million for married couples and is set to expire in 2026. While the future of the exemption rate remains uncertain, few advisors are anticipating that tax rates will go down. As the new administration has taken place, along with a pandemic and stimulus payments, it’s likely that tax payments will go up, generating more revenue for government tax revenue.

Derek Hamblet, Vice President and Client Advisor at Whittier Trust says that “It’s all up in the air at this point; we really don’t know what’s going to happen … but at some point, if you don’t use it, you’re going to lose it.”

With uncertainty in tax exemptions, people with more than $5 million in assets will most likely be looking for a way to maximize giving while minimizing taxes. Below are common estate planning techniques for those nearing estate tax exemption limits.

Use The Annual Exclusion

According to Hamblet, one of the simplest methods to lower your taxable estate is to maximize the yearly exclusion limit, which is presently set at $15,000 every year. The donation might be made to a person or a trust. If someone has three children and six grandkids and wishes to give each of them the maximum amount per year, the total would amount to  $135,000 per year without paying gift taxes.

Donate To Charity

Philanthropic individuals can give to charity in their lifetime. Donors overlook donating to appreciated assets like stock by transferring assets from the estate to a charity. Donating in this capacity avoids capital tax gains as the donor is not exclusively selling the assets.

There are other methods of donating to charities including:

– Donate Required Minimum Distributions To Charity (Qualified Charitable Distributions) 

This method includes the IRS requiring those 72 years of age or older to draw annually from their IRAs. Those who do not require this income can make a direct donation to charity with their necessary minimum payout. Taxpayers can contribute up to $100,000 of their dividends to charity under current standards. The contribution also decreases the income tax burden since necessary minimum distributions are normally treated as regular income.

– Use A Donor-Advised Fund

A donor-advised fund consists of qualified charity donations that are exempt from estate taxes, but some contributors prefer more flexibility in their philanthropic contributions. Perhaps they wish to be able to donate to multiple organizations in the future or spread out their contributions over several years rather than in one big payment. These possibilities are available through donor-advised funds, which are flexible accounts dedicated only to philanthropic giving.

Donors contribute a tax-deductible amount to the fund, which grows tax-free.

After that, the donor can make any number of payments from the DAF to any qualifying charity at any time.

– Use A Charitable Split-Interest Trust 

The taxable estate can also be reduced in the situation where giving to charity is to use a more charitable remainder trust or charitable lead trust. A charitable lead trust is a good option for those who want to give to charities in their lifetime to provide for their heirs. A charitable remainder trust operates in another manner. It first benefits a non-charitable beneficiary, such as the donor or a family member, and then provides the remainder to charity at the conclusion of the trust period.

Use A Grantor-Retained Annuity Trust 

Transferring assets to a grantor retained annuity trust—another form of irrevocable split-interest trust—can effectively lower a wealthy person’s taxable estate and bring it closer to the lifetime exemption limit. The assets are no longer considered part of the estate after they have been transferred to the GRAT. In exchange, they will receive an annuity payment from the trust for a certain period of time. The appropriate federal rate, or AFR, is connected to the annuity and any return above AFR can be transferred to a beneficiary tax-free.

The grantor, or the individual who creates the trust and gets the annuity, is still responsible for the trust’s income tax. Hamblet notes, “you’re getting more money out of your estate by paying income taxes rather than reducing the value of the trust.”

GRATs are only valid for a certain number of years. After the GRAT has ended, the assets can be transferred to the recipient or used to fund another GRAT. If the grantor is to die before the trust expiration date the assets don’t revert back to the estate for estate tax purposes. Advisors recommend shorter terms for older clients to avoid this from happening.

While the tax exemption beyond 2026 remains uncertain it is anticipated that it won’t stay at its current value. As wealthy individuals begin nearing the exemption limits, consideration of reducing the size of their taxable estate may be the best option.

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

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Jun 23rd

What Real Estate Owners Should Know About Capital Expenses

To keep everything in working order, any real estate, whether it’s a multi tenant building, warehouse, or office, needs regular maintenance. Routine maintenance is usually sufficient, but every now and again, a large investment is required for bigger problems like a new roof or air conditioning replacement.

As a real estate owner, it’s vital to prepare for things that aren’t considered routine maintenance or recurring costs.  Without the proper preparation landlords and owners could be forced to pay cash, cutting into their distribution funds or requiring a capital call. Preparing for unforeseen problems now will help save you in the long run.

Real estate is an asset plan that is commonly passed down from generation to generation and often needs ongoing maintenance, on top of nonrecurring maintenance due to the age of certain assets. The need to set aside money for capital expenses is often overlooked, especially when high net-worth families own properties without debt.

Without having a constant reminder or someone looking over the shoulder of high net-worth assets without debt, capital reserves and regular inspections are not always a priority for these types of properties. This is a key component in why budgeting for these items is detrimental.

Creating A Plan

A new roof or HVAC unit is not common capital costs, but when they arise, they are big. A roof, like an HVAC system, may endure 25 to 30 years. However, if they do need replacement it can cost up to hundreds of thousands of dollars, leaving unprepared property owners an unpleasant surprise.

To minimize these shocks and surprises, Ricks recommends including a five-year capital plan. Creating this plan and setting aside 20 cents per square foot per year, will give plenty of room if these capital costs are to ever come up.

When building a reserve for your real estate you’ll be protecting your distributions in the long run, providing a consistent cash flow for all the beneficiaries of every property. In your reserve for capital, the funds could be allocated towards property improvements that would increase the value of a property for sales and/or refinancing purposes. Using these allocated funds on the upkeep of the property would help ensure that it’s not devalued due to deferred maintenance.

Getting A Good Deal

After having ownership of the property for so long, family owners don’t always realize every expense that goes into maintaining it. Property must be taken care of and treated differently because you can’t just go off and sell a portion of it as if it was a stock. Securing bids for every project ensures you’re getting the most cost-effective work on all properties.

Nobody wants to deal with the shock of having to pay for unexpected capital expenses, make sure to plan and prepare so your property and expenses don’t have to suffer. Continue to maintain and uphold your property by creating a capital plan.

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

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Jun 15th

The One Strategy High Net Worth Individuals Depend On To Grow Wealth

Beginning wealth accumulation can be a stressful phase in your lifetime and the pressure that comes with growing your wealth grows with it. Many people may find themselves starting a strategy to deal with high-priority action items, but aren’t able to see how everything works together.

Whit Batchelor, Senior Vice President and Client Advisor at Whittier Trust, explained how a balance sheet approach to wealth may be quite beneficial in this situation. This method examines everything you own—investment assets, company holdings, and real estate assets—from a broad viewpoint, ensuring that your money stays an asset rather than a liability. Here’s how using a balance sheet strategy might help you manage your finances.

It Creates A Path Toward Your Goals 

As you focus on wealth accumulation,  it’s easy to get caught up in the next quarter’s details and lose sight of the bigger picture. Working with a wealth management advisor who can help lead you into the next steps.

Everyone has different goals, whether it’s to continue wealth accumulation for their children or any other scenario. Regardless of the circumstances, using a balance sheet approach to understand how to achieve long-term goals and what can get in the way is critical. Many individuals, according to Batchelor, view their wealth in silos, which could overlook potential avenues toward goal achievement.

An investment manager may focus primarily on your financial portfolio if you’re considering charitable donating. A balance sheet method, on the other hand, would consider all of your assets, such as highly prized real estate, art, and other privately-held investments. According to Batchelor, These are tax-advantaged feeders to philanthropic endeavors that may be overlooked. In some cases, charitable remainder trusts or spousal limited access trust tactics are necessary to maximize gifting and minimize estate taxes.

Streamlining Saves Time And Money

Ad hoc solutions might turn into costly, overlapping accounts over time, draining resources, resulting in additional fees, and adding to the complexity. In the worst-case scenario, it might cause illiquidity, locking up your funds and limiting your cash flow alternatives just when you need them most. Batchelor recalls one client who had built a family business and, over time, set up multiple asset protection trusts.

Batchelor had to help take the client take a step back and assess a few parts of his plan, including asking ‘Well, how will you access the money if you need it?’”

Batchelor adds that other advisors set up the structure, but the client didn’t know how to access the money along with the plan not having any true way of achieving the goals for the funds. The lack of the client’s planning trapped him in a hard-to-understand system.

Batchelor states, “Our clients are financially savvy; they know money,” but their intelligence can lead to over complex situations that don’t play out the same way they do on paper, causing them to run into problems in terms of liquidity, estate planning, and lifetime gifting.

A Solution That Works For You And Your Beneficiaries

Your financial decisions now will have a long-term impact on future generations.

Consider estate planning early in your career to ensure that flexible, sensible arrangements are in place to satisfy your current demands—and the requirements of your heirs in the future.

Financial decisions can become automatic for many high-net-worth individuals. A complicated balance sheet, on the other hand, might benefit from an unbiased counsel who can see the broader picture at some point.

After you’ve grown your wealth, it’s important to ensure that all of your resources are working for you. Using a balance sheet approach allows you to understand what you have and how you create a plan to watch your wealth grow and see financial goals be achieved. For more information, you can download the full report here or visit Forbes to read more.

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Jun 7th

Wealth Planning For Clients With Health Challenges

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.

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