A Story We Hear Often

The Jones family financial success has been the product of a lot of hard work, with a liquidity event that removed any rudimentary financial concerns but has opened a potential pandora’s box of new issues. Creating wealth while running a responsible family can seem simple compared to the new task of building a legacy for future generations of their family.

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Worries and concerns about the legacy planning
process for wealthy families.

How much real estate can we really afford to own and maintain?
Do we have wealth and other sources of income, or is our wealth our only source of income?
Every family has made a few bad investments; how do we make sure to not make a big bad investment?
Can we avoid paying taxes while still controlling our investments?
How much should we include and empower our dependents in this
process?
What happens if we don’t like who our children marry?
How do we get the principals on the same page?
How do we keep our advisors on the same page?

The DLK Four Phase Process

PHASE 1
Principals Only:
Architecture & Construction

Who will be the primary decision makers?
What milestones will be established for moving from dependent to principal?
What structures or entities will be created to house assets and liabilities?
How will the family adapt to changes in asset values over time?
Create an Investment Policy Statement that aligns with the timeline established by the principals.

PHASE 2
Principals and Dependents:
Education and Information

Hold a meeting where the dependents are informed.
Outline the vision and mission of the family legacy.
Invite the dependents to their respective roles.
Establish how the advisors will be working with both principals and dependents.

PHASE 3
Principals Only:
Implementation and Action

Establish and build the entities and legal documents that establish control and responsibilities.
Fund the entities.
Move assets and begin to make investments per the Investment Policy Statement.
Coordinate the communication between the advisors and stakeholders.

PHASE 4
Principals Only:
Cadence and Persistence

Establish the times and dates for communication and decision making if necessary.
Create two timelines, one for the principals and one for the dependents.
Timelines will show who is doing what and when they are delivering the results.
Timelines allow all stakeholders to be on the same page with the advisors.
As markets move and asset prices change at different rates the Investment Policy Statement empowers the entities to remain true to their original intent and ratios.
The persistence mitigates the chances of being too overweight in any one sector.