2025 Week 46

Reimagining the Bequest: How Families Can Shape Social Capital

by with No Comment BlogEstate PlanningInheritanceInvestment Planning

Reimagining the Bequest: How Families Can Shape Social Capital

Many Canadian families already make charitable gifts through their estates; the real question is whether those gifts will happen by default or by design.
 
Recently, I met with a couple reviewing their estate plan. As we walked through the details, I pointed out an unintentional $1 million “bequest.” They were puzzled until I explained that, upon their passing, the Canada Revenue Agency would receive that amount in taxes. Like many families, they were surprised to realize that their taxes at death represent a form of social capital, one that can be thoughtfully directed rather than left to chance.

Social Capital: The Hidden Asset

Every Canadian family with significant wealth has a form of social capital: funds that will ultimately leave the estate through taxes. The real question is whether the family is intentionally directing those funds.
 
Consider this: Canada’s charitable tax rules are among the most generous in the world. Gifts to registered charities generate tax credits that can offset estate taxes. In practical terms, a $2 charitable donation can eliminate roughly $1 of tax, like a built-in government match.
 
Here’s how it works in practice. A family with three children expects each to inherit $4 million, with a $1.5 million estate tax bill looming. Rather than simply paying that tax, the family could redirect it. If each child agreed to receive $500,000 less, the pooled $1.5 million could become a $3 million charitable fund, fully eliminating the tax and giving the family a lasting philanthropic legacy they control together.
 
The key: this choice must be made when the wills are drafted, not after the estate is being administered. By exercising foresight, families can convert potential tax losses into a significant, targeted influence.

Turning Taxes into Impact: How Families Can Unlock Their Bequest

Many Canadians overlook a powerful opportunity: the portion of their estate going to taxes can become a meaningful charitable gift.
 
Know your options: Taxes don’t have to be automatic; they can be directed intentionally.
 
Start the conversation: Open discussions about wealth and legacy create clarity and choice.
 
Think big: The largest “inheritance” isn’t always what goes to children; it can be the impact you leave through giving.
 
Simplify planning: Charitable strategies are accessible for families of all sizes.
 
Shift perspective: See taxes as a tool for intentional giving, not just an obligation.
 
Take your time: Charities can be chosen thoughtfully, over time, not all at once.

Turning Conversations Into Action

These choices should be made during planning, not after death, when emotions are high and options are limited. This is where a facilitator plays a vital role, shifting the focus from “who gets what” to “what do we stand for?” By framing the discussion around shared purpose, families begin to see taxes not just as an obligation, but as an opportunity to create something enduring.
 

A facilitator might ask questions such as, “If part of your estate could eliminate taxes and build a $3 million family fund, would you want your children and grandchildren to carry that forward together?” Or, “Would each child be willing to trade $500,000 of their inheritance for the chance to co-steward something bigger?” These kinds of prompts make the math real and the vision personal.

Once a family has agreed to redirect social capital, the tools to implement that decision are readily available:

●  Donor Advised Funds (DAFs): Cost nothing to set up, can be named in your will, and provide flexibility for heirs to decide over time.

●  Private Foundations: Offer more structure, visibility, and governance for families who want a formal framework.

●  Direct Bequests to Charities: Simple and immediate, though less adaptable for future generations.

●  Charitable Remainder Trusts: Allow income during life, with the remainder gifted later.

The specific tool matters less than the act of making the choice. A $1.5 million tax bill can either quietly leave the estate as an obligation or be transformed into a $3 million, family-directed legacy.

The Gift to the Next Generation

When philanthropy is woven into an estate plan, it becomes more than a tax strategy; it becomes a gift of connection, purpose, and shared responsibility. In our example, rather than each of three siblings inheriting $4 million, they would receive $3.5 million each alongside a $3 million family fund. In their 50s or 60s, they could gather annually to direct grants, with their children observing.
 
Those children would witness collaboration over conflict, hearing stories of the family’s values and sacrifices. They would see stewardship in action rather than entitlement. Here, wealth becomes more than money; it becomes a living legacy of connection, giving, and shared meaning.

Concluding Thoughts

Every Canadian family leaves a charitable gift, often by default, to the Canada Revenue Agency. Instead, let’s say that your kids inherit a $3 million family fund that they manage together. Your grandchildren will be able to see how they work together, share values, and make a difference. The difference lies in choice. At Beacon Family Office at Assante Financial Management Ltd., we help families ensure their wealth reflects their values and lasts a lifetime.

We welcome the opportunity to explore how your estate plan can support your family’s values and lasting impact. Feel free to schedule a conversation with us to get started.

DISCLAIMER:
 
Cory Gagnon is a Senior Wealth Advisor with Assante Financial Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Financial Management Ltd. Please contact him at 403 232 8378 or visit https://beaconfamilyoffice.com/ to discuss your particular circumstances prior to acting on the information above. This material is provided for general information, and the opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.
Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

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2025 Week 42

The Steward’s Playbook: How to Structure Wealth That Outlasts You

by BlogInvestment Planning

The Steward’s Playbook: How to Structure Wealth That Outlasts You

“The greatest use of life is to spend it for something that will outlast it.”
 
~ William James
 
Legacy does not occur by chance. It is built through structure, governance, and purpose.
With vision and resilience, you’ve built more than success; you’ve created opportunity and provided for others along the way. That foundation now gives you the freedom to look beyond immediate concerns and envision what will endure.
 
The questions ahead are no longer about chasing growth or solving the next urgent problem. They are about safeguarding what you’ve built, preparing those who will carry it forward, and ensuring your wealth reflects the values that matter most. These thoughtful considerations invite reflection and pave the way for lasting impact.

Turning Today’s Success Into Tomorrow’s Legacy

Running a company often calls for quick decisions and decisive action. Managing family wealth, however, is a longer journey, one that spans decades, invites many voices, and reflects a range of priorities. With the right structure in place, families can move from reacting to challenges toward building clarity, alignment, and confidence. Defined roles, intentional strategies, and shared purpose create not only stronger investments but also stronger relationships across generations.
 
In our recent Legacy Builders Podcast episode 53, Dennis Jaffe emphasized that “An entrepreneur is a certain personality type… The second generation, however, is different… it’s a group of people working together, and that’s not the reality of the entrepreneur. The next generation has to create a new way of working together, more collaborative and more team-oriented.” That shift underscores why families need frameworks that support collaboration, versus just individual decision-making.
 
I once met a family who had successfully transitioned from operating a business to managing significant liquidity. The family made decisions informally for years, lacking a clear process or defined roles. When differing priorities emerged among siblings, one focused on growth, another on preservation, and a third on philanthropy, discussions quickly turned tense. The absence of structure left them feeling uncertain, even though their financial resources were substantial.
 
If your business needed strategy and governance to succeed, why would your wealth deserve anything less? Families who address this early create clarity and alignment, giving future generations a stronger foundation to build upon.

The Pillars of Stewardship

Stewardship is about designing a system that endures. It brings clarity to decisions, consistency to how wealth is managed, and continuity across generations. At Beacon Family Office, I guide families through three interconnected pillars.
 
The first is structure. A strong foundation includes an Investment Policy Statement rooted in purpose, liquidity planning that anticipates needs and opportunities, ownership and trust arrangements that balance efficiency with continuity, and principles that define how decisions are made. The second is governance. Families benefit from clear roles, accountability, and agreed processes for areas such as philanthropy or private investing. The third is communication. The strongest frameworks thrive when everyone shares a common understanding. Families that thrive are intentional about meetings, conversations, and education, building a shared language that prepares the next generation to act as capable stewards rather than passive heirs.
 
In that same Legacy Builders Podcast conversation, Dennis Jaffe pointed out, “There’s governance of the business, and there’s governance of the family… we want to create responsible people… we have to educate and develop our rising generations… investing in the next generation is the way we want to use our wealth and resources.” In my work with families, I see the same truth: the earlier expectations are set and the rising generation is engaged, the stronger the family’s stewardship becomes.

Investment Strategy With Intention

By this stage, your wealth may include public markets, private equity, direct real estate, operating companies, and alternatives. Each element has a purpose, and when thoughtfully aligned, even complex portfolios can work seamlessly to support the family’s goals and long-term vision. Effective wealth strategy begins with purpose. Beyond returns, it’s worth reflecting on what you’re working toward, how investments align with your broader vision, and who will guide them in the years ahead. A thoughtfully structured portfolio supports liquidity needs, reflects your Investment Policy Statement, and remains clear to those entrusted with it in the future.

The Value of a Thoughtful Plan

Significant wealth offers opportunity, but its long-term impact depends on intentional stewardship. Without a guiding framework, even strong portfolios can face complexity, and transitions may feel uncertain for the next generation.
 
By embracing structure, governance, and open communication, families create clarity and alignment. Wealth then becomes more than capital; it becomes a tool to strengthen relationships, support shared goals, and empower future generations with confidence and purpose.

Concluding Thoughts

You have already proven yourself as a builder and leader. The next role is that of architect, creating systems that reflect your values and prepare your family for the responsibility of stewardship. This work ensures what you have built continues to serve its purpose.
 
It is worth asking how well your wealth is structured today, how prepared your family feels, and what kind of foundation you want to leave behind. The answers will define the legacy you pass forward.

If you want to discuss how to make your wealth clearer and more resilient, I'm delighted to help. The choices you make now will help safeguard what you have built and prepare your family to carry it on. Schedule a conversation today.

Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

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Planning for Retirement as a Small Business Owner

Exit Planning: For Owners Who Aren’t Done Yet

by BlogInvestment PlanningLife Changes
Planning for Retirement as a Small Business Owner

Exit Planning: For Owners Who Aren’t Done Yet

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

 

~ Warren Buffett

Smart owners plan for their exit years in advance, even when retirement is not part of their immediate vision. Most business owners do not simply wake up one day ready to step away. The owners I work with are still building, innovating, and leading. They prioritize growth and impact over winding down.

At the same time, they understand that, either by design or by circumstance, there will be a moment when a transition happens. Exit planning is not a signal to slow down. It is a strategy to create options, reduce risk, and strengthen the business in ways that provide future freedom without giving up control today.

Planning the Next Chapter

Every owner will eventually transition from their business; the opportunity lies in choosing how and when. With thoughtful planning, you can design an exit that reflects your vision, protects what you’ve built, and provides freedom for what comes next. With preparation in place, you can meet life’s unexpected turns, such as death, disability, divorce, disagreement, and distress, with resilience. Rather than feeling caught off guard, you gain confidence in the security of your future, your family, and your business, regardless of the circumstances.

Building a company that can thrive without you takes time and intention. The process starts with identifying where the business depends on you personally, uncovering blind spots, and strengthening the value drivers that make it attractive to a future successor or buyer. For most owners, personal wealth is deeply tied to the business, which makes timing, preparation, and structure critical not only for maximizing value but also for protecting relationships and reputation.

Future-Proof Your Business

While retirement planning focuses on personal lifestyle, such as determining how much is enough and what life will look like after work, exit planning focuses on the business itself. It ensures continuity, reduces dependence on the founder, and prepares the next generation of leadership both inside the company and within the family. 

The questions are different:

● Who will lead when I step back?

● How do we align shareholder expectations?

● Will the family continue to own this business, or will it be sold to the most competitive bidder?

The two disciplines do overlap in areas such as tax strategy, estate planning, and wealth management, but the mindset is different. Retirement planning is about stepping away. Exit planning is about building a business and a legacy that can thrive without you. It is about making sure the structures, leadership, and vision are in place so that the enterprise continues to create value long after you have stepped back from daily operations.

The Value of Planning Ahead

Owners who plan early gain more than time; they gain control, confidence, and flexibility. With a thoughtful strategy in place, successors are prepared, transitions are smooth, and key decisions are made with clarity rather than urgency. Forward-looking planning turns potential challenges like health events, market shifts, or shareholder changes into opportunities to strengthen both the business and relationships. By reducing personal dependency and addressing future needs proactively, owners protect the value of their company while ensuring their legacy endures.

Our Approach to Exit Readiness

At the Beacon Family Office of Assante Financial Management Ltd., we begin with the owner versus the transaction. Together, we explore what “next” looks like personally, financially, and for your family. By preparing all three pillars, you gain the clarity, flexibility, and confidence to choose the right time, path, and legacy, turning your next chapter into an opportunity, not a decision by circumstance.

Concluding Thoughts

When owners begin exit planning early, they give themselves the ability to shape the future of both the business and the family on their terms. The process is less about a single transaction, and this includes building resilience, ensuring that the business can operate successfully without your constant involvement, and aligning leadership to facilitate transitions with clarity and purpose.

A well-prepared exit allows the business to thrive, keeps relationships strong, and gives the next generation confidence in their role. It reflects years of preparation, open communication, and strategic choices that expand options rather than limit them. Owners who take this path often find greater flexibility, stronger negotiating power, and peace of mind when the time for transition arrives.

Thinking about your next chapter? Let’s explore the possibilities, craft a strategy aligned with your values, and set your business and family up for lasting success. Schedule a conversation with us.

Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

Picture of ABOUT THE AUTHOR

ABOUT THE AUTHOR

As the Senior Wealth Advisor at Beacon Family Office at Assante, Cory Gagnon has supported successful family enterprises to preserve, protect and transition their wealth since 2011.

Cory’s personal objective as a Wealth Advisor is simple. He is committed to supporting families to take control of the areas of their lives that truly matter to them. This commitment revolves around using specific tools and strategies that enable families to take action with confidence which will support them through life’s critical transitions.

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Time in the Market versus Timing the Market

How Family Offices Are Adapting Their Wealth Strategies Globally

by Asset AllocationBlogFinancial PlanningInvestment Planning
Time in the Market versus Timing the Market

How Family Offices Are Adapting Their Wealth Strategies Globally

The global economic landscape has undergone significant changes in recent years, bringing with it challenges and opportunities for ultra-high-net-worth (UHNW) family offices seeking to preserve and grow their wealth. They must navigate a complex chain of economic factors, geopolitical risks, and market volatility. In this context, asset allocation has become more critical than ever as family offices strive to build resilient and diversified portfolios that can withstand the tests of time. This leads us to ask – globally, how are family offices adapting their wealth strategies?

For this, we turned to the UBS Global Family Office Report 2024. Here, we were not surprised to find that one of these strategies involves creating a diverse asset allocation strategy. Let’s explore what this can look like, along with what to consider when thinking of your own asset allocation and wealth strategy.

The Shift Towards Portfolio Rebalancing and Risk Management

According to the UBS Report, family offices made significant adjustments to their strategic asset allocation in 2023. One notable shift was the increased allocation to developed market fixed income, which rose to 16% in 2023, up from 12% in 2022, marking the largest increase seen in five years. Conversely, family offices reduced their exposure to real estate from 13% in 2022 to 10% in 2023. These changes reflect a growing emphasis on portfolio rebalancing and risk management.

The move towards fixed income can be seen as a response to the heightened market volatility and uncertainty that have characterized recent years. Family offices are increasing their allocation to this asset class in order to stabilize their portfolios and reduce potential downside risks. At the same time, the reduction in real estate exposure may be a reaction to the sector’s volatility and the potential for asset price corrections in certain markets.

Balancing Traditional and Alternative Assets

The UBS Global Family Office survey, which covered North America, Europe, Asia-Pacific, Latin America, the Middle East, and Switzerland, offers useful information about the typical asset allocation of family offices globally. The data reveals a diverse mix of traditional assets, such as equities (28%) and fixed income (19%), and alternative assets, including private equity (22%), real estate (10%), and hedge funds (5%).

This balanced approach to asset allocation suggests that family offices across these regions are seeking to diversify their portfolios by combining traditional and alternative assets. In doing so, they can potentially benefit from the stability and liquidity of public markets while also tapping into the higher return potential of private investments. However, it is essential to recognize that alternative assets also come with their own set of risks, such as illiquidity and higher fees.

The report also highlights some regional variations in asset allocation. For example, North American family offices tend to allocate a higher proportion of their portfolios to private equity (35%), compared to the global average, while Latin American family offices have a higher allocation to fixed income (34%). These differences suggest that the specific needs and objectives of UHNW families may vary depending on the economic factors and market conditions in their respective regions.

Building an Adaptable Asset Portfolio

Looking ahead, family offices must be prepared to adapt their asset allocation strategies to the evolving economic landscape. Several key factors are expected to shape the investment environment in the coming years, including interest rates, inflation, and geopolitical risks. Highlighted in the UBS Report, it’s stated that 73% of family offices believe that the U.S. will experience positive real interest rates for an extended period.

Globally, as central banks grapple with the challenge of normalizing monetary policy, family offices will need to keep a close eye on interest rate movements and their potential impact on different asset classes. Rising inflation is another concern, as it can erode the purchasing power of wealth over time. Geopolitical risks, such as trade tensions and regional conflicts, can also have significant implications for global markets and investment flows. The UBS report reveals that 58% of family offices are concerned about the potential impact of a major geopolitical conflict on their financial objectives over the next 12 months.

To more effectively navigate the above, family offices are adopting a range of strategies. Some are increasing their allocation to real assets, such as infrastructure and commodities, as a hedge against inflation. Others are focusing on sectors and regions that are expected to benefit from long-term structural trends, such as the transition to a low-carbon economy or the rise of emerging markets. In fact, over a third of family offices plan to increase their allocations to North America (38%) and Asia-Pacific (35%) over the next five years.

Ultimately, the key to success in this environment is to maintain a flexible, diverse, and adaptive approach to asset allocation. Family offices that can quickly respond to changing market conditions and rebalance their portfolios accordingly will be advantageously set to preserve and grow their wealth in the years ahead.

The UBS Global Family Office Report 2024 provides a wealth of insights into how UHNW family offices globally are proactively adapting their asset allocation strategies. The objective of these family offices is to construct enduring and diversified portfolios through the implementation of risk management and portfolio rebalancing, the smart allocation of traditional and alternative assets, and staying attuned to key economic and geopolitical indicators.

Family offices that can stay informed about the latest trends and projections to make informed decisions for their unique needs and objectives will be best positioned to protect and successfully transfer their multi-generational wealth.

Listen to our Legacy Builders Podcast

If you are curious about how these global trends may be relevant to your family portfolio or are seeking new asset strategies, book an initial conversation with Beacon Family Office.

5 Ways you Can Better Organize Your Business’s Finances

The Significance of Asset Allocation for Business-Owning Families

by Asset AllocationBlogInvestment Planning
5 Ways you Can Better Organize Your Business’s Finances

The Significance of Asset Allocation for Business-Owning Families

One way many Ultra-High-Net-Worth (UHNW) families define success is through the enduring legacy they create. It’s a testament to the tireless effort, unwavering dedication, and strategic decision-making that transformed their family business into a thriving enterprise. But amidst the triumphs and challenges of running a family business, it’s easy to overlook one crucial aspect that can determine the long-term stability and prosperity of this legacy: asset allocation. When a significant portion of your family’s wealth is tied up in business, it can leave you vulnerable to the unpredictable tides of the market and the economy.

Imagine a ship setting sail on a vast ocean with all its cargo stowed in a single hold. If the waters remain calm and the winds are favourable, the journey may be smooth sailing. But what happens when a storm hits and the waves threaten to overturn the vessel? Just as a wise captain would distribute the cargo across multiple compartments to maintain balance and mitigate risk, a wise UHWN family steward must consider the strategic diversification of the family’s assets.

Understanding Asset Allocation

Asset allocation is the foundation of a well-balanced investment portfolio. It involves distributing your investments across different asset classes in a way that aligns with your financial goals, risk tolerance, family values, and time horizon. Each asset class has its own characteristics and responds differently to market conditions. For example, stocks are generally considered to be higher-risk, typically offering the potential for higher returns, while bonds are lower-risk but provide more modest returns.

Diversifying your investments offers several key advantages. If one asset class underperforms, others may compensate, helping to stabilize your returns over time. This is crucial for business-owning families because a variety of outside factors, such as the state of the economy, industry trends, and competitive pressures, can impact your company’s success.

In addition to risk reduction, diversification has the potential to enhance returns. Depending on market conditions – and other factors – different asset classes tend to perform well at different times. By investing in a mix of assets, you can potentially capture gains in various market environments and avoid the pitfalls of a concentrated investment strategy. This can help you build wealth over time and achieve your long-term financial goals.

Reinvestment Temptation and Future Business Success

There is an inherent allure to reinvest the majority of one’s profits back into the business, particularly when the returns on investment surpass those of expectation. However, while reinvesting in your company is important for growth, it’s equally crucial to allocate a portion of your wealth to other asset classes.

A real-life example of a business owner who found success through diversification is billionaire investor Warren Buffett, Berkshire Hathaway’s CEO and Chairman. One of the timeless investment lessons he shares in his annual letters to shareholders is about diversifying your investment.

He notes that while focusing on a few high-quality investments can be a successful strategy, it also exposes investors to heightened risk if those investments fail to perform as expected. Furthermore, Buffett stresses the importance of maintaining liquidity and flexibility in one’s financial position. By allocating a portion of your wealth to more liquid assets, such as stocks or bonds, business owners position themselves to have resources available to seize new opportunities or navigate unexpected challenges should/when they occur.

Liquidity for Ownership Succession

Having outside assets is particularly important when it comes to ownership succession planning. As a UHNW business family, you likely have a vision for the future of your company, whether that involves passing it down to the next generation or eventually selling it to a third party. In either case, having diversified assets can provide the necessary liquidity to facilitate a smooth transition.

Consider the scenario of passing your business on to your children. If most of your wealth is tied up in the business, your heirs may struggle to raise the necessary funds to buy out other family members or pay estate taxes. This can lead to financial strain and potentially force the sale of the business under unfavourable conditions. By having a portion of your wealth in liquid assets outside of the company, you can help guide a more seamless transfer of ownership and protect your family’s legacy.

Similarly, if you decide to sell your business, having diversified assets can provide flexibility and negotiating power. You’ll be able to approach potential buyers from a position of strength, knowing that you have the financial resources to wait for the right offer and terms. This can help you maximize the value of your business and ensure a successful exit on your own terms.

At Beacon Family Office of Assante Financial Management Ltd., we work with many UHNW business-oriented families, and there’s one thing they all have in common. They are passionate about their business and want to continue to see it grow and succeed. We suspect that you are no different – passionate and committed to success. Because of this, remember that your asset management abilities have a significant impact on the expansion and success of your business, in addition to your determination and diligence.

Listen to our Legacy Builders Podcast

If you’re curious about how asset allocation fits into your family business or wealth transfer, connect with us today.

Why Succession Planning is Key for Your Business

Wealth Strategies: Facing Unforeseen Challenges with Resilience

by BlogFinancial PlanningInvestment Planning
Why Succession Planning is Key for Your Business

Wealth Strategies: Facing Unforeseen Challenges with Resilience

Life’s plot twists often arrive unannounced. For ultra-high-net-worth (UHNW) families and business owners, these events can present both challenges and opportunities. Twists, such as the inherent instability of the economy, provide an opportunity for family stewards of UWHN families to be more intentionally strategic and forward-looking in their approach to financial security. This intentional strategy builds resilience within family enterprises when confronted with challenging circumstances, building a legacy that can adjust, recover, and thrive regardless of the economic environment.

One essential strategy for UHNW families and business owners revolves around liability and risk management. This requires a thorough examination of existing wealth management strategies and a proactive stance towards potential vulnerabilities. Comprehensive liability coverage should be assessed to act as a robust shield against a spectrum of risks, from property-related challenges to personal and business liabilities. It is crucial to establish partnerships with trusted financial advisors, legal specialists, and insurance practitioners to identify, assess, and mitigate potential risks. This approach allows UHNW families to transform uncertainties about the future into opportunities.

Assessing Comprehensive Liability Coverage

Comprehensive liability coverage is essential for UHNW families and business owners to protect their assets and interests. This involves a thorough review of property insurance, considering factors like property appreciation and specialized assets. Business owners need to adjust their commercial property coverage to account for market changes, expansions, or acquisitions. Personal liability coverage should be tailored to address potential legal challenges, reputational risks, and emerging liability trends.

A holistic review of business-related risks is also crucial. This includes professional liability, cyber liability, and Directors and Officers (D&O) liability coverage. Professional liability coverage, often referred to as Errors and Omissions (E&O) insurance, serves as a shield against claims stemming from mistakes or oversights in the services provided. This is particularly crucial as it mitigates the financial ramifications associated with professional errors, ensuring that any potential legal claims are met with an appropriate defense.  Cyber liability coverage has grown significantly over the past decade and continues to become a necessary investment for family enterprises as it protects you against data breaches and cyber-attacks. D&O liability coverage is recommended for UHNW families and business leaders, tailored to protect the personal assets of executives and board members in the event of legal action arising from decisions made while managing the company.

Implementing Effective Risk Management Strategies

Proactive risk management goes beyond regular insurance coverage. It involves deliberately and strategically dealing with potential threats, acknowledging that just having insurance might not be enough for effective wealth preservation. A straightforward collaboration with financial advisors, legal experts, and insurance professionals transforms into a partnership aimed at accurately identifying, assessing, and mitigating risks unique to an individual’s or business’s circumstances.

Encouraging ultra-high-net-worth (UHNW) families to adopt comprehensive risk management strategies highlights the benefits of moving from reactive measures to a proactive wealth management approach. This means integrating financial expertise, legal know-how, and insurance insights to understand and anticipate potential challenges. The approach recognizes that a one-size-fits-all method won’t cut it for the nuanced challenges posed by substantial wealth and complex business structures. Implementing these strategies aligns with the article’s theme of preparing for unexpected events or crises by fostering a proactive, adaptive mindset capable of navigating the complexities of family wealth management.

Creating a Personalized Contingency Plan

Within the context of crisis preparedness, a contingency plan is a roadmap that outlines specific actions and protocols to be executed in response to unforeseen events. These plans prepare for a range of potential crises, including financial downturns, legal disputes, and personal emergencies. Contingency measures are strategically designed to mitigate the impact of crises and facilitate a swift recovery.

Central to any crisis preparedness plan is the establishment and maintenance of emergency funds. An emergency fund serves as a financial cushion, providing liquidity to navigate unexpected challenges without resorting to liquidating assets or disrupting long-term investment strategies. For UHWN families and businesses, there is an underlying principle: have a dedicated financial reservoir ready to deploy when unexpected events unfold.

In particular, two areas should always be included in a contingency plan. These include legal documentation and effective communication strategies.

  • Legal documentation involves the detailed review, organization, and storage of essential legal documents ranging from wills and trusts to business contracts and property deeds. Legal documentation becomes a key factor in crisis management, offering clarity and structure amid tumultuous circumstances. In your contingency preparedness plan, all critical legal paperwork should be readily accessible in times of crisis, streamlining decision-making processes and safeguarding assets. 
  • Effective communication strategies can save families from misunderstandings and miscommunications. In times of crisis, clear and timely communication is paramount. This involves internal communication within a family or business as well as external communication with relevant stakeholders, financial institutions, legal advisors, and other pertinent parties. Establishing communication protocols in advance ensures that everyone is on the same page, reducing confusion and leading to a collaborative approach to crisis resolution.

When it comes to managing wealth and dealing with unforeseen events, the age-old saying “the only constant thing is change” resonates. For UHNW families, leveraging an integrated wealth management approach allows for proactive and strategic protection, preservation, and growth of their wealth.

Listen to our Legacy Builders Podcast

Ultra-high net worth requires a proactive approach to navigating the complexities of risk. Connecting with a strategic partner to protect your financial legacy helps take the burden off of you - the steward of family wealth. Contact us for an initial conversation about what a proactive wealth strategy means for you.

2024 Week 3

Starting the Year Right: Re-evaluating Financial Wealth Strategies

by BlogFinancial PlanningInvestment Planning

Starting the Year Right: Re-evaluating Financial Wealth Strategies

The first quarter of every year tends to be a time when Ultra-High-Net-Worth (UHNW) families assess what the past year brought and what the year ahead holds. This often involves a re-evaluation of their financial wealth strategies. This reflection is particularly important for those who are stewards of substantial wealth, as it allows them to assess the effectiveness of their current strategies and align them with the evolving financial climate. Along with this, considerations for market dynamics and global economic trends that can significantly impact wealth portfolios allow UHNW families to be more proactive in ensuring their financial plans are robust and adaptive to potential changes. Incorporated into these considerations is the focus on developing a  forward-looking mindset. This mindset allows family stewards to more effectively lay the groundwork for a resilient and flexible family wealth management strategy that lasts for generations. Three areas that this mindset drills down on in relation to wealth include the evaluation of wealth trajectory, navigation of the global market, and developing strategic succession plans for long-term family success and continuing legacy.

Evaluation of Financial Wealth Trajectory

When it comes to managing financial wealth, an annual review becomes an essential means for achieving financial success. Effectively managing your wealth means having a clear understanding of how your strategies are performing. An annual evaluation provides you with a comprehensive snapshot of your strategy’s trajectory, giving you an idea of the current state and potential future paths. This process identifies which strategies are producing good results while enabling the identification of any necessary adjustments or reallocations.

The evaluation becomes a proactive measure for safeguarding and augmenting your generational wealth. Aside from serving as a testament to the resilience and foresight necessary for navigating the complex world of family wealth management, through an annual review, you can stay on top of evolving economic conditions, capitalize on emerging opportunities, and shield your family’s wealth – thereby their financial well-being – from potential risks.

Navigating Global Uncertainties through Diversification

One key aspect that warrants attention is the practice of diversification, a financial strategy that involves allocating your assets across different asset classes, geographies, and industries. This approach is instrumental in enhancing resilience in the face of an unpredictable economic landscape. Diversification serves as a shield against concentrated risks; therefore, spreading assets across a spectrum of opportunities can mitigate the impact of economic volatility.

The emphasis on diversification acknowledges the ever-changing nature of global markets and reflects a proactive stance toward risk management. By strategically allocating your assets, you are positioning yourself to weather uncertainties while maximizing the potential for long-term gains. This deliberate and thoughtful approach to diversification encapsulates the ethos of prudent family wealth management.

Strategic Succession Planning for Long-Term Sustainability

Strategic succession planning is a crucial aspect of family wealth management, ensuring the smooth transition of wealth across generations while maintaining the family’s values and financial sustainability. It requires a balance between open communication, generational education and knowledge sharing, collaborative decision-making, and a forward-looking mindset. Open dialogue among family members, stakeholders, and financial wealth advisors is essential for understanding the unique dynamics and expectations that will continue to shape the family’s financial legacy. Working with a wealth advisor partner, such as Beacon Family Office, helps to facilitate these necessary conversations through a structured framework for open communication and periodic family meetings. Here, UHNW families receive comprehensive guidance, combining financial expertise with a deep understanding of familial dynamics.

A forward-looking mindset is essential for long-term sustainability, as succession planning is an ongoing, iterative process that allows families to adapt their plans to accommodate unforeseen challenges and capitalize on emerging opportunities. This proactive approach ensures the family’s wealth remains resilient in the face of changing circumstances, contributing to sustained financial success across generations.

As you re-evaluate your financial wealth strategies at the dawn of a new year, remember that they include a history built on toughness, forethought, and a promise to change with the times. Always bear in mind that your present is built on the past, while your decisions today lay the groundwork for the future success of your generational wealth goals.

Listen to our Legacy Builders Podcast

If you're contemplating the need for a strategic re-evaluation of your financial wealth strategy at the onset of this new year or if you're seeking guidance on diversification and succession planning tailored to your family's unique dynamics, Beacon Family Office is here for you. Reach out for an initial conversation focused on you, your goals, and the legacy you’re protecting and growing and will one day transfer to the next generation. Book your conversation here. Initiate a meaningful conversation with us today.

3 Reasons Why Investing in Real Estate isn’t for Everyone

Elevating Ultra-High-Net-Worth Families through Generational Financial Wealth Mastery

by BlogFinancial PlanningInvestment Planning
3 Reasons Why Investing in Real Estate isn’t for Everyone

Elevating Ultra-High-Net-Worth Families through Generational Financial Wealth Mastery

January is often a time of renewed wellness focus for numerous families. Our Januarys are filled with new commitments to our physical wellness, emotional wellness, and even our financial wellness. This is no different for many ultra-high-net-worth (UHNW) families. Yet, for aging family stewards, their focus on financial well-being often looks toward how the family unit and family business can secure a sustainable and thriving financial future for the rising generation and what must be done over the next 12 months for this to happen.

This January, as you focus on the financial wellness of your legacy, connect with the rising generation in your UHNW family to discuss strategies to grow their confidence in preparation for when they become the stewards of your family’s wealth. Below are four of these strategies to help initiate these conversations for your family’s long-term financial well-being.

Understand Your Complete Family Wealth

The foundation for securing the financial well-being of future generations lies in a complete family wealth plan that is augmented by an Integrated Wealth Management approach. This involves a thorough examination of your current financial landscape, including assets, liabilities, and potential risks. Along with the more “technical” aspects, there is a deep dive into the overall family values and long-term objectives to ensure there is alignment between the strategic plan and their values. Many of Beacon Family Office’s clients are referred through industry partners, such as the family accountant or lawyer, to gain a more holistic view of how their assets interact with each other and how they can work more proactively together in a way that moves the client’s vision forward.

By including the rising generation in these kinds of conversations, they begin to understand how family wealth remains healthy, what their role will be in the future of the family business itself, and where they may need to further their knowledge to prepare for their future responsibilities. This leads to one of the most important things you can do as a family steward – sharing key knowledge with the rising generation.

Be Intentional with Education and Knowledge Transfer

At Beacon Family Office, we know that the best way to achieve goals and protect one’s wealth is to continually educate oneself. This results in gaining intellectual capital – wealth that can easily be lost if not shared across generations. Be proactive in fostering financial literacy in your family by transferring knowledge about wealth management principles to the younger generation. Ways we’ve seen our clients successfully transfer knowledge have included establishing an educational program within the family business, mentorship initiatives, and regular family meetings. Each of these helps to facilitate an open dialogue about financial responsibility, philanthropy, and the values that underpin the family’s wealth.

One of my favourite things to do is help my clients prepare their children for how to manage a large sum of wealth before they are responsible for it. This can be done in several ways, but the one that stands out most for me is when a client gifted a large sum of money to each of their adult children with the caveat that they were to connect with me on how to manage the wealth they were gifted. Without giving confidential information away, it was an absolute success whereby each child did something different with the significant sum and was successful based on what they did because of the trust they received from their parents, the discretion they were given to use the funds for, and the guidance to their questions they learned along the way. This is a highly impactful way to prepare your rising generation, so you’re not leaving your legacy to chance.

Plan Strategically with Family Philanthropy

Community is our passion here at Beacon Family Office and our clients carry this same value, often expressing it in the philanthropy work and giving that they do. When we include the rising generation in meaningful philanthropic endeavours, there is a deeper connection to the purpose of your family’s wealth. By involving the rising generation in philanthropic conversations, such as the type of legacy giving strategy to build, you give them a voice to influence decisions and care about the impact they can have, fostering a sense of social responsibility.

You’re not just being strategic in your complete family wealth plan. You’re being strategic in how your legacy will continue to do good in the world through your family line.

Remain Adaptable to Technological Advances

Like it or not, technological advances are both simplifying and complicating the work of financial wealth. While we’re not encouraging you to become a leading technology expert in FinTech (unless that’s what you want to do), we do recommend staying abreast of technology and how you can use it as a proactive tool. Technologically literate family members tend to be better prepared to navigate the challenges and opportunities that arise. The future requires that UHNW families embrace change to continue building their meaningful legacies.

What’s fun here is that while you may not be at the forefront of technological advancements, your rising generation may be, thereby supporting you as you navigate the future of your family’s financial wellness today and into the future.

As a UHNW family steward, you know the journey toward securing the financial well-being of future generations is a dynamic and multifaceted one. It was the same as when you initially stepped into the role of family steward. By embracing the rising generation and including them in conversations around family stewardship, philanthropy, and a more holistic approach to wealth, you equip your legacy for a bright future founded on great purpose.

Listen to our Legacy Builders Podcast

If you’re beginning to have these conversations with your rising generation or are curious to learn more about how you can strategically preserve, protect, grow, and then successfully transition your wealth, we’re here to support you. Connect with us today for an initial conversation.

Financial Planning: Balancing Post-Secondary Education and Retirement Savings

The Family Business: The Core of Wealth Generation

by BlogBusinessInvestment Planning
Financial Planning: Balancing Post-Secondary Education and Retirement Savings

The Family Business: The Core of Wealth Generation

The family business is more than just a source of income. It’s the preservation of family values, shared aspirations, and a lasting legacy. It stands as a testament to the enduring strength of family collaboration and the potential for building generational wealth.

History is filled with success story after success story of family enterprises. Companies that started as small family businesses, such as Johnson & Johnson and Ford Motor Company, grew into international conglomerates, standing the test of time, remaining committed to a family vision, and operating on their core values while being open to adapting as the world and economy continue to evolve. This willingness to adapt while remaining true to the legacy created becomes the foundation of success for family enterprises.

The Need for Diversification

While the family business is typically the nucleus of a family’s financial well-being, it can also present risks. Overreliance on a single asset can be a double-edged sword, especially when market dynamics fluctuate. Therefore, diversification in the family asset portfolio becomes paramount. 

Diversifying into other private assets, such as real estate, private equity, and infrastructure, can provide a cushion against market volatility. Take, for instance, the Rockefeller family, whose diversified portfolio has withstood the test of time. By branching out beyond the oil business that initially propelled their wealth, they secured their financial future. Here are some of the other fields they invested in, to mention a few:

Banking and Finance: The Rockefeller family has had a notable presence in the banking and financial sectors. David Rockefeller was an American investment banker who acted as chairman and chief executive of Chase Manhattan Corporation (now JPMorgan Chase), which was a key institution associated with the family’s financial interests.

Real Estate: One of the notable projects in which the Rockefellers have invested in real estate properties and development was the development of the Rockefeller Centre in New York City, a prominent commercial complex.

Philanthropy: The Rockefeller family is also renowned for its philanthropic endeavours. John D. Rockefeller, Sr., established the Rockefeller Foundation in 1913, which has been involved in funding various educational, medical, and social initiatives worldwide.

Success stories such as the Rockefeller serve as a reminder that a well-balanced portfolio can be a game-changer for preserving and growing family wealth.

Categorizing the Enterprise

Managing family wealth involves understanding the nuances of the family itself, along with the intricacies that come with coordinating multiple assets. This complexity is best supported by a strategic management approach, such as integrated wealth management. This approach provides one primary location to coordinate, advise, and manage the various aspects of your wealth, such as the family business, financial assets, real estate, heirloom assets, and deferred assets. Each category requires unique attention, expertise, and care.

Family business demands continuous innovation and nurturing, ensuring it remains robust and adaptive. Financial assets, such as stocks and bonds, require expert financial management to optimize returns. Real estate can serve as both a source of income and additional portfolio value. Heirloom assets, laden with sentimental value, deserve special preservation and insight to protect and transfer. Deferred assets, including trusts and long-term investments, represent the legacy waiting to be passed on.

By categorizing assets in this manner, families can gain clarity and devise tailored strategies for each component. This ensures that each asset is properly preserved and protected, clearly articulated for distribution, and accounted for based on the impacts of the greater family wealth portfolio.

The Role of Family Offices

With the complexity and intricacies that come with a family enterprise, the family office plays a crucial role, particularly when you look at wealth management as a whole. Family offices serve as the compass, steering the ship of family wealth through uncharted waters. These institutions bring professional expertise, specialized knowledge, and a commitment to family values to the table in order to help the family enterprise thrive over multiple generations.

One aspect of the family office that family enterprises benefit from is working with a dedicated private wealth advisor. These individuals help develop and implement diversified strategies that align with your family’s long-term goals, both personal and professional. Whether it’s structuring investments, tax planning, or facilitating intergenerational wealth transfer and successor education, family offices play a pivotal role in safeguarding the family’s financial legacy.

Listen to our Legacy Builders Podcast

While the family enterprise is often the primary source of generational wealth, it is merely one piece that helps these legacies last. Rather, diversification, categorization, and the expertise of family offices are essential elements in ensuring the enduring strength of family wealth. By embracing the above strategies, families can safeguard their financial legacies and create opportunities for generational collaboration that transcend time and circumstance. The journey to lasting wealth begins with these deliberate steps. If you're ready to take the next step, connect with the Beacon Family Office today. Together, we'll safeguard your family's financial legacy.

5 Outside Factors that Can Help You Determine Your Investment Spend

5 Outside Factors that Can Help You Determine Your Investment Spend

by Investment Planning

Your investments are heavily influenced by a number of external factors, ranging from interest rates to commodity prices.  Before you invest, it’s essential to understand how these factors affect your returns. Read on to learn more about the most important outside factors that can help you determine your investment spend.   

Interest Rates

When the economy starts to expand rapidly, the Bank of Canada (BOC) often raises interest rates in response to prevent too much borrowing. In contrast, when the economy begins to slow down, the BOC lowers interest rates in order to stimulate borrowing to boost the economy. These changes in interest rates can impact investments quite significantly, especially if companies need to pay more for loans or materials when the rates rise, as this often leads to lower profits. However, some investments will rally when the interest rates spike, such as short-term bonds. It’s important to talk to an advisor who understands the relationship between investments and interest rates to guide you with your financial decisions.

Current Events

A devastating natural disaster like a hurricane, new government policies, political uprisings, and elections can have a direct impact on the stock and bond market. Even a relatively small incident can have severe consequences for your investment portfolio. That’s why it’s vital that you are well diversified and taking on the appropriate risk level for your age and financial condition.

Taxes

Taxes also affect your investment portfolio. Without the right tax plan, your returns could take a big hit, which is why it’s important to pay careful attention to the income tax consequences of your investment decisions. Otherwise, you could end up paying high capital gains tax that could have otherwise been avoided.

The State of the Economy

High unemployment and low economic growth can cause people to become more frugal, keeping more money in their own pocket. This eventually creates more stress on the economy and in turn, on your investments. This is yet another reason why it’s important to have a long-term strategy in place that you can stick to through good and bad times.

Commodity Prices

The prices of commodities such as oil, gold, lumber, and wheat have a tremendous impact on the earnings of public companies and the markets. For example, the price of oil can affect a wide spectrum of companies, from manufacturers to retailers. Companies like Amazon have to ship all their products and therefore, rely on the cost of fuel. If they can’t pass on the price to consumers, then they have to internalize the damage which can hurt the stock prices along with your investment in the company.

As you can see, there are many outside factors that can help determine your investment spend. If you don’t have time to stay informed, it’s best to hire someone who can manage your portfolio for you. Our team of financial advisors are here to help you shape your portfolio to ensure maximum earnings no matter which direction the outside factors move in. Contact us today to get started!