Category Archives: Estate Planning

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Photo of kayak surfer on river in California. A good kayaker is like a family dynasty that can ride the waves on the open water.

How to Create a Family Dynasty

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I’ve been studying how to create a family dynasty for the last 10 years. It turns out that there are 8 Keys to a family’s long term success. I’ll explain the importance of these 8 Keys by telling this story. In 2012, I was fortunate to spend a couple of days with the adventure photographer, writer, filmmaker and wilderness guide Michael Powers in Half Moon Bay, California – about 40 miles south of San Francisco. Michael is an avid ocean kayaker, and prefers riding the big waves at Half Moon Bay on his kayak—what’s called kayak surfing.

Michael took me kayak surfing at Mavericks where the waves routinely crest at 25 feet but can get to 60 feet! I had never before been kayaking, and I had never been kayaking on the ocean, let alone a destination for extreme surfers. What I learned is that you need to have balance, momentum and persistence to get past the initial waves, which are called “breakers.”

The breakers treated me like a homeless person at a country club brunch. At least once I remember tipping over with my legs still stuck in the kayak and—being the beginner I was—trying to figure out how to extract myself while holding my breath and trying to avoid leaving parts of my face among the submerged sand and rocks.

About 50 feet from shore, the waves turned into giant swells. If you timed it just right, and had your kayak angled just right, you could glide down these swells like you were sledding. If not, well you would be trying to get back on a kayak while the giant waves kept coming at you, without being able to touch the ground.

Here’s what I found most interesting. There is a distinct difference between the area close to shore, where the breakers keep trying to push you back, and the open water. Sure there are dangers in the open water as well. But the rules are different. In the open water, you can focus on having fun. But close to shore, you just keep getting pushed back.

This reminds me of how most families are in terms of being able to preserve and grow their wealth from generation to generation. From a long-term (multi-generational) wealth enhancement standpoint, most families never get past the breakers. That’s why having a family dynasty is so rare. Until fairly recently, it has required a minimum of roughly $50 million for a family to be able to implement all of the systems necessary for a family to prosper indefinitely (especially the family office component). But things have now changed. With the help of new options—multi-family offices, outsourcing companies, and new technologies—families no longer need to hire full time staff to ensure their long-term success.

Most families prosper for a lifetime, and then leave some measure of wealth to their kids. If the family is somewhat sophisticated or owns a profitable business, the second generation may be able to hold onto that wealth for their lifetimes. But the initial wealth rarely survives to the end of the third generation.

At Half Moon Bay, I was able to get past the breakers when I was kayaking for the first time, largely because I had a good coach. And I believe that families can get past the financial breakers and create long-term wealth that will survive more than 100 years—even with less than $50 million in net worth—if they follow the steps of other families that have made it.

In the coming blog posts, I will introduce the 8 Keys to a family’s long term success (i.e., how to create a family dynasty). For more information, go to EachGenerationStronger.com.


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Girl holding paper airplane dreaming big about being a pilot. Parenting means teaching a child like this to dream big..

Parenting: Raising children to be motivated

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How do wealthy people raise their children to become self-motivated and resilient? The short answer is that rich parents teach their kids three main things: (1) to dream big and take risks, (2) to guard their money and spend it strategically, and (3) not to be nostalgic, but to focus on the future. In this blog, we’re going to focus on the first part: dream big. Parenting with a focus on these three steps will help prevent kids from becoming dependent on the family’s money.

Teaching kids to be risk takers.

Wealthy people teach their kids something different. The central theme to their parenting style can be summed up in one way: Be A Risk-Taker

This means that wealthy families raise their kids to look at life the way it should be played in a bold and fearless manner; that there is nothing wrong with thinking big.

This, of course, makes their kids grow up thinking that they can be anything they want to be if they become risk-takers. This is why they usually get into the business world not in support-type of positions, but in front-office positions.

In these positions they are at the forefront of making the actual revenue for the organizations and at the same time they make a lot of money for themselves. This also means that they are the kind of kids that will grow up and go for careers that are painful in the beginning, but over time that pain becomes worth it. Those careers include being investment bankers, money managers, entrepreneurs, investors, high-level government positions, etc.

Teaching kids to guard their money and spend it strategically.

This makes the kids of wealthy parents not spend money on short-term endeavors as much as their non-wealthy counterparts. Even if spending that money will provide comfort, they will not spend money easily. Therefore they are more likely to grow up to spend more on long-term endeavors and less on short-term endeavors, which overall helps to keep their family wealthy for the next generation.

This has implications for estate planning. We don’t just focus on simply transferring wealth. Getting a big windfall doesn’t always help motivate a person. Rather, we make the money available in a trust, but without outright distributions. This is what wealthier families do. This parenting advice applies to grown up children as well. I’ve seen too often that middle-aged “kids” get an inheritance, quit their jobs, go on lavish vacations, and then have to go back to work because they have no retirement savings.

Wealthy families raise their kids not to be nostalgic.

This means that they teach their kids not to ponder about better times in the past. Wealthy parents do this in the hopes of making their kids always think about the future and to always have a forward-thinking process. The hope is to make their kids become problem-solvers and improve on other people’s lives so that they can move on into the future and not be nostalgic to the point where problems pile up and the family’s wealth gets jeopardized.
You can read more about how rich parents teach their kids to be rich here.  Do you have any other suggestions? Let us know below.

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US musician Prince performs during his concert at the Sziget Festival on the Shipyard Island, northern Budapest, Hungary, on Tuesday, Aug. 9, 2011.

Why Prince should have had a Will

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I’m disappointed with Prince. Here’s why. He was in a position of influence because of his popularity, but he left as a legacy a court battle over his estate. And worse than that, he left a trail of emotional trauma and possibly financial damage to his family. First, let me update you on where things stand regarding Prince’s estate. Then I’ll tell you why Prince should have had a Will.

Quick update: According to an article in Reuters, 29 people have had their claims denied in the Prince probate proceeding in Minnesota. These folks (I won’t call them vultures) included a professed secret wife who said the CIA had classified their marriage records as top secret. Among other would-be heirs denied by the court were five people who came forward claiming Prince was their biological or adoptive father. Several others claimed their dad was also Prince’s genetic parent by way of an extramarital affair with his mother. There is no final word on who the heirs will be, since some have to submit to genetic testing.

For all the taboos that Prince pushed against (sexuality in particular), he certainly avoided the taboo of talking about death. And I say this all as a fan. I’m originally from Minnesota. And I saw the movie Purple Rain in my hometown of Winona, Minnesota when it first came out. Also, I’m proud to say that my high school (Cotter High) recorded a jazz band album in the same recording studio where Prince recorded the day before in 1980. (I played alto sax.) We could still smell his cigarette smoke. That was a pretty cool experience.

So … here’s why I’m disappointed with him:

  • His family is having to fight each other (and a bunch of strangers) over who gets what.
  • The lawyers are having a field day raking in fees, which is what Prince would NOT have wanted since he was always so careful to manage his own affairs.
  • The people who are inheriting from his estate are getting a financial windfall. This is a recipe for disaster. Various articles on the internet claim that 70% of lottery winners end up in bankruptcy. I couldn’t find any actual research about this. But from my experience, I would not be surprised about this statistic.
  • He completely missed an opportunity to help causes that he cared about … perhaps teaching music to underprivileged kids.

Anyway, I would like some popular icons and leaders to actually do a good job of planning for their deaths and give us that kind of positive experience. But, then again, I guess that wouldn’t make it in the news because it would be handled quickly and privately.

If you have any questions about Wills or Trusts, give us a call. We regularly handle high net worth estates, including some famous people. We are discrete with our clients. Prince was not my client, otherwise (a) his estate wouldn’t be an issue like it is, and (b) I wouldn’t be bad-talking about him here (because of our obligation of confidentiality).


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Photo of the musician Prince on a purple motorcycle

Bequeathing Trouble: Prince’s Estate Plan

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Prince’s death came as an enormous shock to the world. And the $150 million in estate taxes that his family will end up paying will come as a shock to them. It turns out that Prince’s estate plan was to not have a plan.

The untimely death of the enigmatic music icon left two things:

  1. Millions of grieving fans
  2. A vault of unreleased recordings

But just what’s going to happen to those recordings—a collection reportedly large enough to release new music for the next 50 years—and the 57-year-old pop star’s $300 million in assets, is still very unclear.

Why?—because Prince died without setting up an estate.

The absence of an estate plan is surprising for an artist known for his meticulous attention to detail, but in reality it is an all too common occurrence for the wealthy.

  • “It’s too expensive”
  • “It’s too much trouble”
  • “I’m not planning to die”

These are ALL lines I’ve heard over the course of my career, and they’re all equally frustrating to hear. I really shake my head at the “It’s too expensive” excuse. Consider Prince’s example. If his estate is worth $300 million, as reported by CNBC, then his family will pay half of that in taxes. Compared to $150 million, spending $50,000 in estate planning sounds pretty cheap to me.

You see, whether Prince wasn’t ready to think about his own mortality, or he simply forgot to form an estate doesn’t matter. What DOES matter is that his heirs are now going to be mired in paperwork with government.

By failing to form an estate plan (or even a will), Prince died intestate, which means no instructions were left. No instructions mean the government has to fill in the blanks. A court will appoint an executor for the estate, and after debts, taxes, and probate costs, will divide what’s left according to the laws of intestate succession.

Prince completely surrendered his right to control what happens to his worldly possessions—music, money, property, clothing, jewelry, etc.—by not taking the time to form an estate plan.

Worse still, he’s pass along the financial, emotional, and legal burden of settling the estate to his family.

In my experience, when a high-value individual dies intestate, lengthy in-family legal battles over rights, custody, or the valuation of assets, are not far off.

In the case of Prince, the deceased artist’s sister and half-brother have very different ideas about what should happen to his unreleased recordings, and those different ideas will—at some point—lead to a legal confrontation.

Prince’s legacy—his legend, his unpublished songs, his wealth, his property, his famous outfits, everything—will be controlled by people he has never even sat down and had a conversation with.

The executors of Prince’s estate literally don’t know him any better than you or I do—we can only hope they’ll make decisions he would approve of.


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