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actionable intergenerational wealth planning practices Archives - David Werdiger

Family Office Priorities

Family Office Priorities

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Family offices (FOs) come in so many shapes and sizes that the term ceases to have specific meaning. It’s simply a set of services provided for a family. The origins of the FO often determine their primary focus: there are plenty of FOs that are simply vehicles for co-investment, or glorified reporting platforms. Having a FO essentially means taking a professional approach to managing the affairs of the family. It’s interesting that 92% of FO…

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Wealth Guilt & Shame

Wealth Guilt & Shame

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Wealthy people are a soft target at the best of times. The media revels in sensational stories about wealthy families, especially when things go wrong. And if that wasn’t enough, neo-socialists in the US preach redistribution and question whether the world should have billionaires. The emerging “wealth minimisation” movement encourages inheritors to redistribute “excess wealth” for the betterment of society. In some cases, this is about making up for the “harm” done by the wealth…

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Transition - Hold or Fold

Transition; hold or fold?

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Kenny Rogers sang of the importance of knowing “when to hold ’em, and when to fold ’em”. Any succession plan worth its salt isn’t just a plan of who will succeed whom in running the business. It also needs a “Plan B” for the scenarios where the chosen successor is unwilling or unable, where there is no successor, or where a generational transition of the business might lead to serious conflict. Some business founders/owners enjoy…

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Pareto principle and the Family Business

Pareto Principle and the Family Business

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A “universal truth” about the imbalance of inputs and outputs is what became known as the Pareto principle, or the 80/20 rule. While it doesn’t always come to be an exact 80/20 ratio, this imbalance is often seen in various business cases, Here we will address how not to sell a family business. 0% of all businesses do not sell, and only about 30% of family businesses get handed down to the next generation. If…

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windfall liquidity wealth risk

Windfall liquidity carries risk

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Coming into wealth suddenly – such as through inheritance or a windfall liquidity event of a family business – can carry serious risks. The rapid change in financial circumstance can lead to poor decision-making, a loss of perspective, and social isolation. It can lead to a dysfunctional relationship with money/wealth. In the case of inheritance, there can be mixed or conflicting emotions of loss and gain. It can be like winning the lottery, and research…

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The Problem with Wealth - Publicity goes both ways

The Problem with Wealth

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This is a difficult topic to broach, and needs to be done only in appropriate settings – indeed, that might be the most important message of this topic. After the story of BMW heiress Susanne Klatten went public, she was slammed on social media. Her personal challenges – the responsibility, self-doubt, and being targeted by scammers – are real. But it’s very hard for anyone brought up without wealth to have any sympathy (and often it’s the reverse), so seeking it from ‘outsiders’ is almost a waste of time.

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Charitable Giving or Inheritance?

Charitable Giving or Inheritance?

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The challenges of bringing up children with wealth are predicated on the idea that said wealth will transition to said children. But what if it won’t? Some families are thinking more about giving away the bulk or almost all of the family wealth to charity. In the US, families are talking about giving a maximum of $15M to each child (and the rest to charity). There are different reasons driving this (don’t want to leave…

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Lets talk about the family business

Let’s Talk About This

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One of the biggest challenges in wealthy families is when/how to talk about the family wealth to children. There are a number of factors to consider: 1. Being aware of other ways children will learn about it themselves, e.g. from the media, direct research, and from friends (it’s a bit like sex education). Would you rather your children find out about the family wealth from reports and rumours that are laden with assumptions? It’s better…

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Leadership vs Entitlement

Leadership vs Entitlement?

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The e-word – “entitlement” – comes up in almost every presentation or lecture I give, and in many family discussions. It has become almost a dirty word when it comes to family wealth – something to be avoided at all cost. “How can I prevent my children from becoming entitled?” is what most every parent wants to know. When it comes to family business, limiting the negative impact of entitlement can be achieved by instilling…

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Purpose in Family Business

Purpose in Family Business

By Articles, Familosophy, Featured Posts, In The News, LinkedIn, original No Comments

Family business has positives and negatives – our aim should be leverage the positives and seek to mitigate the negatives. One important distinguishing feature of family businesses is that they can embody a sense of purpose. The original purpose of the business founder may have been wealth creation. However, as the business evolves and additional family members join, it’s an opportunity for the family as a group to discuss and articulate their collective values and…

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