BT MAGAZINE 2024 VF no marks 8 oct - Flipbook - Page 46
ISSUE 17
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Diversification
Like a good investment portfolio, a diversified approach
helps protect against market ups and downs. Spread your
investments across various asset classes to minimise
risk. Diversification is a fundamental principle of
investment strategy that reduces risk by allocating
investments among different financial instruments,
industries, and other categories. This approach helps
ensure that one asset class’s performance does not
significantly affect the overall portfolio. Historical data
and financial theories support diversification as a way
to achieve more stable returns over time.
Philanthropy
Giving back can also be a smart financial move.
Establishing a family foundation or making charitable
donations supports causes you care about and offers
tax benefits. Philanthropy can reduce taxable income,
potentially lower estate taxes, and provide a lasting
legacy that reflects the family’s values and priorities.
Notable examples include Bill and Melinda Gates,
who established the Bill & Melinda Gates Foundation,
supporting global health and education initiatives. Such
philanthropic efforts not only contribute to societal
good but also offer significant tax advantages and help
in maintaining the philanthropic legacy of a family.
Education and Communication
Open communication about financial goals and
educating heirs about wealth management are
crucial. Regular family meetings can ensure everyone
understands and supports the legacy plan. Education
and communication help prevent conflicts, provide
a smooth wealth transition, and maintain family
harmony.
Many wealthy families, such as the Rockefellers,
hold regular family meetings and involve younger
generations in discussions about wealth management
and philanthropic goals. This practice ensures that heirs
are prepared to manage their inheritance responsibly
and uphold the family’s values and objectives.
2. Define Your Legacy Goals
What do you want your legacy to achieve? Clarity is
key, whether it’s maintaining family wealth, supporting
charitable causes, or ensuring your business continues.
3. Consult Professionals
Engage with estate planners, tax advisors, and wealth
management professionals. Their expertise will help
tailor a comprehensive legacy plan to your specific
needs.
4. Implement and Review
Put your plan into action and review it regularly. Life
changes, and so should your legacy plan. Keep it updated
to reflect new financial situations, family dynamics, and
legal requirements.
SECURING YOUR LEGACY FOR FUTURE GENERATIONS
Creating an iconic family wealth legacy is an
ongoing process that combines careful planning,
strategic investment, and continuous education.
By thinking like an icon and planning strategically,
you can build a dynasty that reflects your values and
aspirations. Diversifying your investments, engaging in
philanthropy, and ensuring open communication and
education among family members are crucial steps in
this journey.
Proactively addressing estate, tax, and business
succession planning with professional advice
ensures your wealth not only endures but also grows
for generations to come. Legacy planning is about
securing financial futures and upholding family values
and traditions, making it a gratifying endeavour. By
implementing these strategies, you can create a lasting
impact and ensure your family’s financial security for
the future.
“Effective legacy planning isn’t just
about wealth transfer; it’s about
instilling financial acumen and
family values. Trusts and other
estate planning tools are essential
in minimising tax burdens and
safeguarding assets.”
PRACTICAL STEPS TO START LEGACY PLANNING
Embarking on the journey of legacy planning requires a
systematic approach to ensure all aspects of your wealth
and intentions are covered. Taking these practical steps
will help lay a solid foundation for a comprehensive
legacy plan that meets your family’s needs and goals:
1. Assess Your Assets
Begin by taking stock of everything you own—real
estate, investments, business interests, and personal
property.
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