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How will heirs manage your wealth

How Will Heirs Manage Your Wealth?

By Richard Riva

As the owner of a family business, you’ve poured everything you have into growing your company and achieving the success you deserve. Have you thought about how your heirs will manage your wealth beyond your lifetime? Since money is already a subject of discussion avoided in our culture, too often high-net-worth families fail to lay the necessary groundwork to ensure inherited wealth is managed successfully.

A study of 3,200 high-net-worth families by the Williams Group wealth consultancy found that in 90% of the families studied, their entire fortune was gone by the third generation. (1) Preparation, communication, and trust are critical as you pass on your legacy to your heirs. Here are some essential things to consider as you leave and extend your legacy to subsequent generations.

Communicating To Your Heirs

Have you communicated your mission and vision to your family? Just as any successful organization has a mission and vision that employees live by at work, make sure you’ve established a mission and vision for your children and grandchildren to live by as well. Furthermore, it would be best to communicate the mission and vision regularly with them. Hopefully it will spur dialogue so you can better understand if it aligns with their values too. You’ll gain an understanding of their willingness to carry on the torch moving forward and establish a solid foundation they can refer back to later on.

Supporting Your Heirs

Most entrepreneurs achieve success because they are fervently passionate about what they do. Will heirs be joining the family business, or do they have different careers of their own they’ll be pursuing? It is important to find ways to support those joining the business and those seeking other professions, and to be clear about how you will do that. Generally, this helps establish openness and trust.

Equipping Your Heirs

How well you prepare your heirs for receiving the inheritance will likely make or break your efforts to extend the legacy you leave behind. Develop an understanding of what prosperous management of your wealth will look like with education and communication. 

Two ways to accomplish this is to teach them financial practices and involve them. For example, you could establish custodial investment accounts for your children to cultivate good savings and long-term investing habits. Or get them involved in your philanthropic efforts. Have them research causes they are passionate about, and show them how they can give now and in the future. School them on the knowledge and habits you’ve relied on to grow your business. You’ll supply them with an understanding of what lies ahead, preparing them for when they do ultimately inherit your wealth.

Sometimes, even with the best of intentions, heirs also have to be protected from their own undoing as well. Establishing a trust that issues smaller payments over time is one way to help minimize adverse outcomes from occurring as you pass on wealth. Talk to your financial professional to help determine if you should pursue that course of action.

Our Team Is Here For You

Any business owner knows they are only as good as the team they’ve assembled around them. The same goes for your legacy as well. Ensure you have a reliable team of qualified financial professionals that can help you manage all of the technical and strategic aspects of extending your legacy. At Wealth Management Solutions, we’re here to help you advance your family’s purpose by incorporating appropriate financial solutions at every stage of your life. Schedule a complimentary consultation by contacting us at (949) 475-9700 or info@wms-llc.com.

About Richard

Richard Riva, the founding partner of Wealth Management Solutions, helps families advance their purpose in the framework of family financial matters. He brings comprehensive experience in banking, trust and investment services, and as an independent financial business, the passion in helping people and families, as a trusted advisor. Richard is a proud veteran and currently serves on the California State Guard.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific investment advice or recommendations for any individual.  


(1) https://www.marketwatch.com/story/heres-why-90-of-rich-people-squander-their-fortunes-2017-04-23#:~:text=About%20seven%20in%2010%20wealthy,number%20has%20jumped%20to%2090%25.



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