Lifestyle continued...
Although each family is unique, they share prevalent problems that family wealth advisors can recognize and assist. Some common family issues include conflict between family members that prevent them from taking action, families that have differences between members yet deny any disagreement, and past hurt feelings preventing family members from making reasonable compromises. Families typically have differences between generations, especially regarding life experience, different perspectives, intergenerational culture, and values. At times, the older, wealth-creating generations have become successful in their career or family business and are used to doing things in a specific way. On the other hand, the family’s younger generation may not be motivated to create their own wealth. Or, if they are, they may want to try new, innovative and potentially “risky” ventures, and the older generation may not agree. It is up to the wealth advisor to negotiate between the two sides: helping the older generation understand their children and preparing them adequately for the future, and helping the younger generation develop the mindset needed to create and manage wealth accordingly throughout their lives. Many older generation members are unaware of what other families are doing, do not want to face unavoidable life changes, and are uncomfortable understanding new possibilities. Those who are part of the family’s younger generation may be accustomed to an affluent environment and don’t feel the need or desire to acquire their own revenue to grow wealth throughout their lives for the next generation. Our advisors at Spectrum are experienced in dealing with complicated family issues and obstacles that interfere with financial decision-making and planning processes. They commonly encounter situations that require a delicate touch, knowledge and creative problem-solving skills. Below are some common areas we assist family clients with. Clarify values and shared visions. Every family has a set of unique values that determine how they conduct as a family and a business. A great way to encourage everyone involved starts with putting the spotlight on what matters most.
Values and visions for the future need to be clearly defined, confirmed and properly implemented. Our experienced advisors can help start the process with a positive focus on what family members agree on before diving deeper into conflicts. Gather pertinent information to understand the “Big Picture” in the family business. At Spectrum, we want to ensure we have all of the information needed to help simplify your financial life and help you deal with complexities as they come. Our advisors seek to get client perspectives via interviews and documents to learn about the business itself, how different family members view the family and family business, and learn more about each individual’s agenda. Encourage transparency. Family conflicts regularly emerge due to a lack of communication among family members. Often, family members do not have correct or adequate information. Our team of advisors can help appropriately and cohesively bridge the gap in communication so that all involved have the core facts and accurate information. Bring everyone together. Our advisors are talented in encouraging open communication between family members and bringing everyone together to discuss future goals. While every single family member may not have a say in the decision-making process, they can still help family members discuss intentions and help navigate through areas of differences. Help clients live life by design and move towards their financial goals with confidence. Clients often think there is only one way to get the desired outcome regarding financial goals. Our advisors can tactfully address family members from all generations and challenge families to reconsider decisions that will help them achieve their goals by taking action in areas that may be new, uncomfortable or unexpected. Creating a plan of action for the best future possible starts with establishing objectives that align with your long-term values and moving toward taking proposed steps to reach your goals.
WOMEN AND WEALTH
Advanced Estate Planning Concepts for Women
Leslie Thompson CFA ® , CPA, CDFA™ Editor and Chief Investment Officer Co-Founder
Statistically speaking, women live longer than men. If you are married, you will likely have the last word about the final disposition of all of the assets you have accumulated during your marriage. You will want to consider whether these concepts and strategies apply to your specific circumstances. Please note that many of the limits addressed below are subject to change should the items addressed in our earlier article, Taxes, What We Know Now— Summary of the September 2021 House Ways and Means Committee Tax Proposal pass.
Transfer Taxes When you transfer your property during your lifetime or at your death, your transfers may be subject to federal gift tax, federal estate tax, and federal generation- skipping transfer (GST) tax. (The top estate and gift tax rate is 40%, and the GST tax rate is 40%). Your transfers may also be subject to state taxes. Federal Gift Tax Gifts you make during your lifetime may be subject to the federal gift tax. Not all gifts are subject to tax, however. You can make annual tax-free gifts of up to $15,000 per recipient. Married couples can effectively
18 PERSPECTIVE Fall 2021
PERSPECTIVE Fall 2021 19
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