The main aspects to safeguard wealth for future generations of affluent families are that the assets should be sustainable over many generations, resistant to inflation, and well-shielded from political and economic changes. Regardless of whether you are the first generation to produce generational wealth, or you are seeking to understand how to sustain your inherited wealth, this article will offer you the right guidance.

Importance of Family Values

A family history which comprises of how wealth was generated can be a strong base for developing family values. Histories can be embedded in books, albums, and/or videos which comprise of interviews with matriarchs and patriarchs and can include other family members, friends, and main associates, providing several perspectives.

Several families curate their values statements which enlighten the family identity, the “mission” and “vision.” Inclusivity is essential while drafting these statements as they must contemplate the entire shared values of the family. It is essential to record that family values statements vary from corporate values statements, that are generally curated by founders; and sometimes the family members. Organisations may dismiss the employees for behaving against the values of the organisation. However, one cannot terminate their family, hence when a family member does not share the same values, they can be distanced and view their disparities as greater than they actually are.

Once the values have been determined, the next step is to examine if you are genuinely living your values and, if so, how they are impacting you, your relationships with family members, and plans for the future. The following questions can help in guiding you with the above:-

• How does this value serve you?
• How does this value hurt you?
• How do you react when this value is challenged by others?
• What blind spots do you have because these values are significant to you?

As you discover how your values impact your behaviour, it is equally significant to acknowledge how various generations and family members interpret shared values. Variations will have an effect on future planning considerations as well.

Vital Discussions to Have

Discussing with your family heart-to-heart about their stance in respect to your family wealth will enable you to instantly determine any possible feelings of inequity which might be impeding or persisting and cater to them before they get gain any further momentum.

It is significant that each family member is completely aware of their contribution, and compensation from your family wealth. This is inclusive of their position in the family business (if any), the administration and maintenance of family-owned assets and properties, the authorisation of an ‘allowance’, the contribution towards big expenses (such as education for children), and so forth.

Identifying decision-making tactics in the family can make sure that all members are ‘on the same page’ when it is concerns financial decisions, while explaining the role and responsibilities of each family member in the decision-making procedure.

Wealth can frequently need an adaptation period, specifically in households which have seen an essential increase in wealth over a comparatively brief duration of time. In the end, with wealth comes opportunity, and establishing the ‘what’ and ‘how’ of spending, saving, and investing; needs thorough examination.

Communication gives you a wonderful opportunity to prepare the next generation in how to sensibly handle your wealth after you have passed it on to them. It also offers you a prospect to groom an heir to cater to your business interests and/or investment portfolio after you leave office.

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Wealth is More than Just Money

Several wealthy families have a dedication to a multigenerational heritage of shared intent. Their families believe the true meaning of wealth is more than the numbers on a balance sheet to comprise in a family’s social, intellectual, and philanthropic capital.

Frequently, these families have a set terminology of mission, vision, and values which is transparently communicated, understood, and adopted. Collectively, they offer the plan of action and direction for the family. The mission is the statement of intent for the family. The vision offers navigation over time. Values elucidate on identity and the purpose. Shared values aid families in directing the emotional landscape between generations. These values are also a significant aspect of the legacy left to future generations and should be shared across generations.

A Labuan Private Foundation is a registered corporate entity with its own legal body. It is generally utilised for private wealth management, asset preservation and business succession.

Read more : Wealth Management and Succession Planning

Advantages of A Labuan Private Foundation

• Founder has complete control at all times
• Founder is able to portray how the foundation is to be organised and handled, the kinds of assets to hold, and its beneficiaries with freedom to change anytime via the Charter
• Founder can be a person or a corporation
• Reasonably low cost to function and keep a Foundation compared to a Trust
• Founder is safeguarded from foreign claims and cannot be vehemently liquidated to satisfy other obligations like claims arising from lawsuit or creditors after 2 years
• It is a corporate body entitled to enter contact and perform lawful dealings
• It is a legal entity completely safeguarded by its own Labuan Foundation Act 2010, without the requirement to refer to other jurisdictions’ law
• Duration / life span of foundation can be perpetual or for a fixed period of your choice
• No minimum amount of assets requirement to be seeded for initial set-up
• Permissible to hold worldwide assets including Malaysian assets

Wealth management is a continuous consultative procedure and is an important element especially for the affluent individual and families. It is of utmost importance that you identify and develop the best possible wealth management and succession plan to preserve your wealth and estate. Connect with our QX Trust team of wealth management consultants at CONTACT US or consultant@qx-trust.com to discuss on your plans and wishes for you and your future generations.

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