5 Strategies to Protect Family Wealth

If you are concerned or wondering how to protect your family’s financial wellbeing at the time of your death you are already ahead of many. Understanding how to maximize the protection of your personal assets at the time of your death can ensure long-term financial stability for the people closest to you. Protecting family wealth is unique due to the growth, development and changes that are inevitable in a family system, but also because tax laws and liability in other parts of our lives that may impact our ability to maintain the wealth we have. Fortunately, there are plenty of tried and true methods to wealth protection and the legal landscape allows for a diversified strategical approach.

As every family is different, every family will need a slightly different combination of strategies to optimize wealth succession. The types of wealth owned by a family, the age of your family and family dynamics will all influence how you decide to pass on your assets. When you consider how you will use the tools available to you to protect your family’s wealth, it is important to know some answers about your situation ahead of time. Here are some initial questions to consider as you investigate the strategies below:

1. What kinds of assets do you currently have or plan to have? (stock, real estate/property, financial assets, goods, etc.)
2. What is the general value of your assets and which ones are most important to you?
3. What is the timeline of protection you are seeking on your wealth? Your lifetime? Future generations?
4. How much control do you anticipate will be helpful to the transfer of assets as your family matures and newer generations emerge?
5. What is your vision and ideal use for your assets in the future?

Will and Testament

A will or testament is a common and important part of long-term protection of wealth. However, it is a tool that may need more consideration because it may not be the best option for the safety of all assets when used only by itself. Wills are a place to lay out who may inherit valuables and some assets, but the assets transferred through a will are often susceptible to greater tax costs and probate, including the time needed for the process of validating and authenticating a will. Depending on the clarity of the will and the dynamics of the family, assets are liable to be caught in a jungle of discrepancies and family feuds.

While wills are important and can be useful components to long-term wealth protection, it is important to be aware of and thoughtful about which assets may need greater protection from taxes, potential lawsuits or issues surrounding probate, and which assets do not need extra instruction or protection.

Gifting of Assets

Gifting assets may be a perfect action for you and your family in certain instances. Gifting is a fantastic short-term transfer of wealth that is clear and largely burden free. You can gift up to $15,000 to each individual per year without a tax associated with your transaction. In addition to this, the lifetime gift tax exemption is effective up to the amount of $11.4 million. Due to the simplicity of this option, as well as the lack of tax, lifetime gifts may fit your long-term plans for your assets well.


Trusts are common and excellent tools to use when protecting family inheritance and wealth. Simply defined, a trust allows a trustor, the owner of a sum of wealth, to give a trustee the right to hold assets for a third party, a beneficiary. The trustees help to manage the assets placed in a trust.

The benefits of trusts are numerous, which is why they are used quite extensively. Trusts allow a degree of separation between the family name and the assets placed within the trust. Trusts are also flexible and can hold a wide range of assets. Real estate titles, money, and stock can all be kept in a trust, allowing a diverse accumulation of wealth to be protected from family squabbles and high probate costs. In addition to flexible contents, trusts also uniquely provide for long-term and detailed plans for assets. If there are assets that families would like to save for their children and future generations, trusts are an excellent way to keep these assets safe and accounted for if there should be an unexpected death in the family. Families can dictate instructions for the future of assets in a trust and can ensure that a maturing child will be taken care of in the event of an accident, without giving full access to a child who is not yet ready to take on responsible financial decisions.

In addition to this, a long-term and detailed plan is necessary for the proper functioning of trusts over time. The plan’s benefits generally outweigh the costs that attorneys charge to create. Realistically, it is this detailed and clear plan that really makes a trust such a valuable option for families seeking to protect their wealth.

Diversifying and Adjusting

Given that there are so many options and tools at your disposal, it is best to take time to determine what will most effectively keep your assets safe over time. It is wise to use many different tools and to diversify protective measures as well. You are not locked into one kind of proactive strategy and your strategies can even change over time. Revisiting your options will only strengthen the protection of your assets and create greater assurance that your family will continue to benefit from the financial stability you have created for them.

If you would like guidance and advice about creating a comprehensive strategy to protect your family’s wealth, contact our experienced and trusted team of advisors today for a consultation.