BMO Private Wealth
September 5th, 2024
For ultra-high-net-worth families, wealth management is about more than managing money. It’s also about envisioning strategic planning for the future, including planning for assets as they pass from one generation to the next…
Similarly, legacy planning is more than creating an estate plan, it adds personal expression guided by purpose, “to make the impact you want to have on the world – the mark you want to make,” says Shelley Forsythe, Director of Family Enterprise Planning, BMO Family Office. Legacy planning takes time and is a continual process, especially when adding voices from different generations.
Legacy planning is also about determining family values that guide future generations, preparing heirs to be stewards of the wealth and much more. However, legacy planning, is often easier said than done, especially with complex assets and structures that could involve businesses and real estate in various locations, as well as multiple family members across generations.
While a family office arrangement can help support a legacy plan through administration, management, and governance mechanisms, several factors can complicate the process, from tax and legal issues to the emotional challenges that arise from family dynamics. “If you want assets to pass multi-generationally, then there needs to be a thoughtful and intentional approach to how you’re going to organize that,” Forsythe says. “What is the purpose of the wealth and family? What conversations will support the shared vision for the future? What kind of ‘flexible’ roadmap do you want to co-create? What kind of frameworks, plans and processes make sense to put in place from a structural perspective?”
While it is impossible to predict the specific challenges you will face, Forsythe identifies five key factors that can assist with successfully navigating legacy planning:
- Succession and continuity planning
- Transparent and ongoing communication
- Governance of ownership, enterprise assets and family
- Family discovery and dynamics awareness
- Philanthropy
While legacy planning can be complex, incorporating these five key factors into the process can help to shape success.
Every family is going to be a little bit different in terms of the number of topics they want to discuss or are comfortable talking about at one time. You just need to take a thoughtful, intentional approach, as well as setting and managing expectations. Break it down into bite size chunks and keep the momentum going.
Shelley Forsythe, Director of Family Enterprise Planning, BMO Family Office
