Every wealth creation event has a story behind it, and it is in those stories we find the seeds that have germinated and blossomed into a family history and culture. The stories mean nothing, however, if they are lost in the mists of time. They must be preserved, revisited, and kept alive through family sharing if they are to inform successive generations.Storytelling itself is as old as human language. Even today, both ancient and modern cultures pass on knowledge through oral traditions. In the stories told from generation to generation, listeners learn and absorb the history, values, custom...

A family 'like ours'My siblings and I agree that we are fortunate to come from a family like ours. When I say, ‘like ours,’ I mean very close, sort of ‘in each other’s business,’ and with a sense of responsibility for preserving our family dynamic and the opportunities that we have been afforded. I know that, while we are not common, there are other families like ours out there. It would be extremely beneficial for me to know how those families organize themselves. I am especially interested in how families approach integrating new members into the family.When asked to clarify what generation ...

How are families adapting to changing market dynamics?While investing has never been straightforward, investing today in the face of current uncertainty feels overwhelming to many long-term investors.Faced with today’s starting valuations and current yields, many investors have little confidence that the traditional equity/bond portfolio that has generated meaningful returns over the past 30 years will be able to produce the investment returns expected and likely needed by a family to maintain wealth for generations.Amidst the current uncertainly lies opportunity; many families are materi...

This may not come as a surprise, but individuals have lost trust in the major institutions that have served as the framework of our modern society. Businesses, NGOs, government, and the media have all suffered a loss of trust in recent years for a variety of reasons.One of our great fears about a world where trust is imploding across the board is that families will be driven to turn away from their external advisors and become more self-directed or insular, making them vulnerable to traps and jeopardizing their success. On the other hand, in times of great vulnerability and distrust, the loyal...

Given the current state of the market, many investors that I am speaking with are considering changes to the “what has worked before” approach.When I am looking for guidance on the complex macro environment, I often turn to Jeffery Gundlach, CEO of DoubleLine Capital, LP. I have asked DoubleLine to open the FOX Spring Investment Forum in San Francisco on March 13 and present their views on this complex environment. Jeff laid out his thoughts in a recent DoubleLine newsletter, Thought Leadership, released on January 9, 2018. He has been exceptionally prescient in the past years, and his mantra ...

In December 2017, Congress passed the Tax Cuts and Jobs Act; a bold legislation designed to overhaul America’s tax code for the first time in 31 years. House Speaker Paul Ryan (R-WI) declared, “The Tax Cuts and Jobs Act is a game-changer for our country.” Taxpayers will see significant changes when they prepare their returns for 2018. Below, we've provided a helpful guide to understanding the impact of tax reform on individuals, itemized deductions, pass-through businesses, and corporations. Personal Income TaxesDeductionCurrent LawNew Conference BillStandard Deductions & Pe...

With all the media coverage in the last couple of months, you have certainly heard at least tidbits about the new Tax Cuts and Jobs Act (Act), signed by the president in December. One of the most important provisions of the Act for high net worth (HNW) families is the increased exemption amounts for estate, gift and generation-skipping transfer (GST) taxes. HNW Families Should Take Advantage of the Increased Tax Exemptions for Gifts Wealthy families should look at ways to take advantage of the significantly higher estate, gift and GST tax exemptions contained in the Act. In fact, if ...

I am fascinated by the complicated ways that automation may transform the labor force—and how dramatically the acceleration of technology in the work place may impact the economy—and society, more broadly. As one example, how might driverless cars, taxis, and trucks affect issues of productivity and income inequality, and what type of retraining may be needed to find gainful employment for those affected? McKinsey Global Institute, the business and economics research arm of McKinsey & Company, summarizes their research on the potential implications of automation and shifts in job crea...

When you are a business-owning family, sometimes you can become so completely focused on the growth and continued success of the business that you forget the equally important mission of focusing on family. Family business owners of course need to understand the nuances and performance of the business in order to remain knowledgeable and caring owners, but they also need to spend time getting to know each other—whether siblings, cousins, grandchildren, nieces, nephews, etc.—regardless of what each person’s role might be in the family and in the business.A great way to keep the family flowing a...

Like many holidays, Valentine’s Day is a time when employees celebrate, while HR representatives, in-house counsel, and business owners hold their breath. In the #MeToo era, employers should consider proactively addressing workplace relationships and shoring up internal policies for dealing with complaints. Here are some tools to help employers get in the Valentine’s Day spirit.Addressing Budding RomancesWhat could be more romantic than giving a beau a “love contract” for Valentine’s Day? Even in the age of online dating, many Americans still meet their spouses at work and many more try. (Surp...

Whether establishing a new trust, modifying an existing trust or dealing with a transition of the incumbent trustee, selecting the person or institution who will act as your trustee is one of the most important decisions you and your family members will make. Many families want to keep everything “in the family,” and it is natural for them to consider using a close family member such as a parent, sibling or cousin for this important position. It is also natural to worry if this choice will come back to haunt you later. Check out the answers to common questions below to see if this choice ...

A Private Family Trust Company (“PFTC”) offers families the ability to have intergenerational governance over family assets, and provides a private forum for decision-making. However, if the PFTC does not have the proper operational model, it could become another headline story about family discord and mismanagement. Appropriate internal controls, fiduciary oversight and regulatory compliance protect the family from:Theft by a PFTC employeeInappropriate exercise of fiduciary oversight, resulting in claims by beneficiariesA negative audit by regulator or auditor, undermining family confidence i...

Preparing the next generation, especially wealthy children or trust beneficiaries, is one of the hottest topics in the high net worth world. Quite frankly, the consequences of not addressing this are enormous and impact future generations. Resources are squandered, cracks form in family relationships, and in the case of trusts, adversarial relationships may develop and fester – triggering dysfunction that manifests for generations. The possibility of a next-generation family member polarizing either to overspending and self-indulgence or burdensome guilt and shame is increased greatly without ...

The Private Family Trust Company structure has evolved from a new concept to one that is now established and used widely by family enterprises as a strategy for managing increasing complexity within their enterprise. With the evolution of the PFTC, there are hard questions that need to be asked such as how should and how does the PFTC contribute to a family’s most important goals and how does the PFTC protect the family’s most important assets? In this blog, Robert Galloway, Partner, Baker Hostetler raises unique questions to consider when operating a PFTC in order to maintain standards that f...

From a historical perspective, the private family trust company (or PFTC) is a relatively recent structure employed by successful, strategically-oriented families. Those who manage these structures have been, in most cases, focused on those entities’ organizational and operational requirements. However, many of those managing PFTCs have been quick studies and are now looking beyond their entities’ most pressing, initial needs—proper organization and implementation of effective operations and risk management—to focus on how their PFTCs can help trust beneficiaries live better, more satisfying l...

What is a Private Family Trust Company?A private family trust company (PFTC) is a state-chartered entity designed to provide fiduciary services to members of a family. PFTC is distinct from a “family office” in that it can serve as a fiduciary under state law. Private family trust companies can take on many responsibilities commonly performed by the family office, including investment and financial management, accounting, and recordkeeping. They can also operate separately from the family office, while still relying on it for administrative and back office support through a se...

Cybersecurity is a topic of great concern among our members as many face the challenge of keeping family members and their financial information safe. Scott Augenbaum, a 30-year veteran of the FBI, offers the following 15 cybersecurity tips that don’t cost a lot of money or take a lot of time, but that can help you eliminate 90% of your risk of experiencing a cyberattack:Think before you click on a link or open an attachment; become a human firewall and question every email.Intrusion Detection Systems are a must, but they will not stop everything as virus writers write in excess of 50,000 new ...

Is it ever worthwhile to accept concessionary investment returns?If your foundation’s aim is to achieve not just personal financial gain but also a specific positive social or environmental impact, the answer is a resounding yes. Foundations make program-related investments (PRI) to support charitable activities, with the potential return of capital within an established time frame. For example, one of the Bill and Melinda Gates Foundation’s many PRI is the Charter School Growth Fund, a low-interest loan reinvestment aimed to “provide high-performing and high-potential charter school operators...

When I was in third grade, my teacher brought in some maple tree saplings as part of a science lesson. We were shown two possible places to plant these saplings; one spot was in an old forest with many mature trees, and the other was in an open area with no other surrounding vegetation. Many of us choose the open area thinking the trees would get more nutrients by standing on their own; however, what I learned was that young trees grow better when planted around older trees. Young trees benefit from the pathways and protection created by older trees, allowing them the opportunity to develop a ...

I recently had an amazing opportunity to spend a few days with 46 millennial clients who came to Silicon Valley for our Next Generation Program. Focused on the theme “Innovate for Impact,” the program was hosted by our Family Wealth Advisors team and BNP Paribas Wealth Management.The 4-day event gave attendees, hailing from 18 different countries, an immersive experience in which they met with well-known tech entrepreneurs, evaluated startups as they pitched for venture capital, and toured the headquarters of Facebook and LinkedIn.The event also featured panel discussions and lively interactio...

“To thine own self be true,” William Shakespeare famously wrote. The same could be said of organizations, many of which tirelessly work to ensure that they uphold the principles expressed in their mission statements — but with one gap, the investments made out of their endowments. That’s where mission-related investments (MRI) come in, as they help foundations leverage the resources in their endowments for positive financial and social change.Broadly speaking, MRI are financial investments that follow an organization’s mission, with a goal of generating both social and financial return. ...

The U.S. Department of the Treasury plans to withdraw proposed regulations issued in August 2016 that would have narrowed or eliminated taxpayers’ ability to claim valuation discounts on transfers of interests in family-controlled entities.The Treasury Department’s October 2 announcement that it would withdraw the proposed regulations was part of a broader report on the Treasury Department’s review of tax regulations issued since January 1, 2016. The announcement identified one additional set of proposed regulations to be withdrawn entirely; three final, temporary, and proposed regulations to ...

You’ve worked so hard to make your family business a success, but eroding trust and simmering conflict threaten to derail the progress you’ve made. Is that a sign that your family business won’t make it to the next generation?Not necessarily. In fact, most conflict in family business is natural, rational, and predictable. After all, family businesses have to navigate a whole host of challenges that most other businesses don’t – the power, status, money, legacies, and relationships at stake are enormous. The decisions that family businesses face are of significant consequences to many stakehold...

Even highly responsible children can compound cyber risk to the entire household. They are more trusting than adults. They inadvertently engage with cyber thieves in gaming situations. Some work around security to see sites their parents don’t want them to visit. And, many of them are far ahead of their parents’ ability to keep them from making mischief online — in fact, many of them act as the family’s de facto tech support.Discuss the following tactics with your children to help them protect themselves, your family, and your assets.“Never talk to strangers, even online". Some people who you ...

Paramount to every enterprise is a healthy, abundant supply chain. Regardless of the end product, the quality and quantity of the raw materials will dictate the quality of output. For those of us in the business of funding other businesses, a good, strong source of high quality deal flow is essential.When I started to design the business model for Skin in the Game, I wanted a better, less expensive way to generate deal flow. Knowing supply-chain disruption from my past life, I sought to build a source pipeline that was plentiful, diverse (in sector, region, founder) and automated – with no sta...