In planning multigenerational family wealth, Clearstead brings clarity, transparency, and simplicity to complex family wealth situations. Our bench is deep, and these clients make good use of all aspects of it, giving our team a chance to really use its collective toolkit for maximum benefit.
Step 1: Gain Clarity
To be truly efficient, even the most complex portfolio begins with a thorough planning process. Clearstead begins by asking a potential client to bring us as much data as possible: trust documents, tax returns, insurance, bank statements, private placements, and capital calls, for example – we want to get our heads around every piece of the financial picture.Our team then analyzes all aspects of this portfolio at a high level and generates a customized ClearSight Analysis, which is a thorough picture of the client’s net worth that simplifies a very complex situation as much as possible. The analysis essentially serves as a road map for the next 12 months; it’s our way of quantifying how much value we can add from day one. We begin to assemble our team, from the managing partner down to the administrative assistant, and everyone in between.
Step 2: Tax Optimization and Investment Policy
At the outset of our relationship with new clients, particularly those that involve several family members across generations, we clearly communicate this plan and walk through it together until it is well understood. We show how every asset is tracked and what stage of the process we’re in, ensuring that no detail is overlooked. Then we hit the ground running.One of the most common areas we identify with multigenerational families is tax optimization. Clearstead has commonly found thousands of dollars in savings simply by identifying appropriate strategies that previous accountants missed. Some estate planning can even save millions of dollars.We also create investment policy statements based on our clients’ goals, time frames, and risk tolerance. These policy statements serve as our guide for managing things like assets and educational trusts. Each individual within the family structure might have their own policy statement that is unique to their personal goals.We assist clients with cash flow planning, whether it’s long-term, such as preparing for retirement, or short-term, such as deciding whether to finance a home or make purchases using portfolio assets.
Step 3: Next-Generation Engagement
Clearstead also has extensive experience in teaching younger generations about managing family wealth. Often we’ll work with the senior generation while the children or grandchildren are young and discuss goals, then craft a plan that teaches responsible fiscal behavior. For example, at an annual family meeting, we might give the younger generation the responsibility of a smaller gift. We ask them to generate a list of charities to receive the gift, and to explain the rationale and due diligence, such as how much of the donation is earmarked for the charity’s administrative costs.This sets up stewardship expectations for the younger generation, preparing them as we move into the next steps of understanding their own trusts.Typically, Clearstead holds annual family meetings with clients, as well as quarterly meetings with the individual clients who are part of that larger family. Ultimately, our goal is to strategize with our clients to help them realize their goals while protecting the wealth they have worked so hard to build.