Family Dynamics Flashcards
Describe key family roles and positions for trusts
Grantor - individual that created the trust, transferred assets into the trust, and oftentimes, is the individual that pays taxes on the trust. Can be multiple individuals
Trustee - an individual or institutions that administers the instructions of the trust. Act as a fiduciary, must act in the best interest of the trust and the beneficiaries
Beneficiary - individual that receives benefit from the trust property. Can be multiple individuals, and for certain trusts, can be entities like charitable organizations
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Describe key family roles and positions for closely held businesses
- Owner
- Key employee is someone that significantly impacts the business or operations; crucial to success
- Can create business succession plans and transactions that pass on business interest to family members or key employees
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Describe key family roles and positions for family foundations
- It’s a private foundation typically started by an individual or family that wishes to control most or all charitable donations
- Has the potential to memorialize a family name and pass on responsibility to future generations in regard to charitable giving
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Describe key family roles and positions for LLCs
- Owners of an LLC are called members
- If family owned, there may be restrictions on who interest in the business can be sold or transferred to
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Describe key family roles and positions for charitable organizations
- Perhaps utilize a donor advised fund, can make contributions and later decide how to donate money to organizations
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What is Human Capital?
Who are the individuals, the family members
* Talents
* Passions
* Experiences
* Callings
What is Social Capital?
Family member’s civic engagement, community connection and extending care beyond your own family
What is Financial Capital?
Family member’s
* Money and other assets, such as stocks, bonds, real estate, and trusts
* Purpose: a tool to develop and express the other dimensions of life that create lasting and sustainable success
What is Intellectual Capital?
Family member’s
* Knowledge and capacity to learn
* Communications and managing family differences & conflict
What are the necessary elements to conduct a successful family meeting?
- Obtain agreement
- Establish purpose and goals
- Design collaboratively and create expectations
- Clarify expectations and format
- Obtain information and invite participants
- Create a safe environment
Describe Family Governance Models
A family office can provide governance and management
structures that can deal with the complexities of the family’s
wealth transparently, helping the family to avoid future conflicts.
At the same time, confidentiality is ensured under the family
office structure, as wealth management and other advisory
services for the family members are under a single entity owned
by the family (?)
What are the elements of an effective family mission statement?
Every statement should include the values in which your family wants to live their lives by, the family’s goals, and the way in which everyone plans to achieve these goals
Define family’s goals, priorities, values, strengths, weaknesses
When should a single-family office be used?
Useful when the client wants privacy and ultimate cohesion across privacy, security, and wealth preservation. They manage financial affairs of a single family. They will engage in all, or part of the investments, fiduciary trusts, and estate management of a family
When should a multi-family office be used?
If there’s a cultural fit, if they want to minimize involvement and control, if cost is a factor, then MFO may be better. Manages the financial affairs of multiple families, who are not necessarily connected to each other
Several families pool their wealth together and assets are managed under one umbrella
Components of Good Communication
- Discovery-focused interviewing
- Communicating clearly about the process of advising
- Speaking the client’s language
- Listening well, actively and passively
- Managing yourself
