8 Ways to Keep Family Wealth in the Family

Whether you’re a successful business owner, investor, or the beneficiary of a trust, if your total assets are valued at or above $1 million, you should be planning for the future and beyond. Maintaining your family’s financial growth and passing it on to future generations requires careful estate planning and it’s never too late to get started.

By developing a clear financial plan, consolidating your assets, and educating your heirs, you can reduce risk and guarantee that your hard work and financial savviness continue to grow into the next generation. Take time to set clear guidelines for your fiduciary future and keep your family wealth safely within the family.

Incorporate these 8 tips into your estate plan and rest easy knowing that your money is safeguarded from future disasters. For more advice on how to manage your estate, contact Sim Gakhar today.


1. Create a Comprehensive Financial Plan

Financial wealth requires a wealth of knowledge to grow past a single generation. If your family is worth more than $1 million, you’ll need a clearly defined fiduciary plan to manage higher tax burdens, diversified investments, real properties, and your personal philanthropic endeavors. Your financial plan should identify protective strategies and include:

  • Guidelines and projections for future growth
  • Explorations into future monetary goals
  • Recommendations for future investments
  • A plan of action

Although a financial plan can take time to create, a trained expert can help advise you on how to proceed.


2. Simplify Your Estate by Consolidating Assets

Diversifying your portfolio is never a bad idea but opening multiple accounts of the same type across a range of institutions can needlessly complicate your estate. Remember, diversification is about spreading out your investments, not where you store your money. If your estate is unnecessarily spread across institutions, you can cut costs and simplify management by consolidating your assets.

At the end of your life, it will be easier to pass on your estate if it’s consolidated in one or two institutions. If not, your heirs will have to work one-on-one with each side of the estate to access their inheritance.


3. Pass on Your Financial Wisdom

You likely didn’t fall into wealth for no reason. If you’ve managed to grow your family estate beyond $1 million, you surely have a wealth of financial knowledge and wisdom to fall back on. Yet, that doesn’t mean your heirs will be as prudent with their inheritance. It’s important to share your financial wisdom before you die, to help bolster your estate for the future.

Often, children raised in a more privileged environment lack the same respect for hard work and the value of a dollar. Once they come into their inheritance, they may quickly squander it on frivolous expenses rather than investing it wisely. Teach your children from a young age how to budget, set monthly expenses, and manage their finances before they inherit your family wealth.


4. Use Your Surplus Capital Wisely

If you’ve managed to grow your family wealth beyond $1 million, you surely have more assets than you’ll need for the remainder of your life. Keeping those funds squirreled away in a bank account might sound smart but it’s actually costing you more than you realize.

Rather than hiding your money in a bank, use it wisely by sharing the wealth with other prudent family members, investing it in life insurance policies, donating to charities, or placing it in trusts. By spreading your wealth across these avenues, you can avoid heavy estate tax burdens and even avoid paying taxes at all.


5. Manage Risks While You Can

Be smart about where risks come from and how you can avoid them. Above-average income families are most typically at risk of:

  • Lawsuits
  • Market swings
  • Loss of income

You can protect your family wealth from lawsuits by wisely investing it in trusts and life insurance policies. Once out of reach, no one can touch your finances. As for market swings, diversifying your portfolio across multiple industries should provide enough security to prevent any unforeseen dips and prevent you from losing income in the long term.


6. Plan for Other Properties

If you’ve earned enough to own a separate vacation home, plan ahead for what will happen to it after you die. Vacation homes often become a source of conflict between children who wish to inherit the pristine property. Set up a trust to appropriately bequeath your properties without having to pay probate fees and inheritance taxes.


7. Be Charitable

If you’re wealthy, charity is a win-win situation, no matter how you look at it. On the one hand, you’re able to make real change in the world by putting your money behind important charitable foundations. On the other, you can reap advantageous tax benefits by declaring your donations or establishing a recognized charitable foundation.

If you opt to establish a charitable foundation, be sure to go through the appropriate channels. Foundations are still beholden to the law and are often audited to guarantee they are in compliance with Canadian federal regulations.


8. Have a Plan of Succession in Place

If you are a Canadian business owner, you need a plan in place for who will manage the business after you die. Click here.

Start early by identifying which of your children is most capable and interested in managing the family business. Once you’ve decided, speak with your successor, and explain that they will gradually take on the responsibilities of the family’s assets. As you age, progressively bring them to the helm.

Be transparent with your children and build a coherent financial plan together. Only by including them in the business’s future can you hope to make it grow past a single generation.


Where to Get More Advice?

If you need help establishing a trust, writing a will, or diversifying your investment portfolio, contact Sim Gakhar. Sim is a licensed insurance agent and skilled investment advisor who can guide you through everything you’ll need to safeguard your family’s wealth into the next generation. It’s never too late to plan for the future when you work with Sim Gakhar.



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