Families that work together effectively are much more likely to preserve their wealth. “Soft structures” can help everyone get on the same page and avoid costly pitfalls. Find out how to involve younger generations in goal setting, and how to develop guidelines for investment, philanthropy, education, and mentorship.
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A perpetual trust is the best structure we’ve found to protect wealth from taxes, legal threats, and internal disputes. It creates a family of producers, not consumers. Money is only distributed for productive projects – like education or career advancement. This model emphasizes self-reliance and individual achievement.
The heart of the family office system is a council that manages distributions, resolves conflicts, and plans for the future. The council should hold regular meetings and try to include younger members and spouses. This will create a decision-making process that lasts for generations.
Just like a successful business… successful families need a mission statement that everyone can get behind. This is the family council’s first task. A clear mission statement gives your family a common purpose, goals, and values. Larger families may need to expand it into a family constitution.
You don’t want seedy Wall Street advisers exploiting your loved ones after you’re gone. That’s why it’s crucial for younger members to learn about investing and how money works. The investment committee should have a long-term outlook, share knowledge, set clear objectives, and hold brokers accountable for performance.
The family bank is where members can go for funding of entrepreneurial ventures, education, homeownership, or health care needs. These can be outright disbursements or interest-free loans. But in the interest of long-term wealth preservation, the bank should not be used for handouts or bailouts.