Safeguarding Your Legacy: Insights from Dr. Tom Deans
You’ve worked hard to build your wealth. Now, you’re facing one of your biggest challenges: how to pass it on to the next generation. It’s a journey many families struggle with, but you don’t have to go it alone.
We recently hosted Dr. Tom Deans, a renowned expert on family wealth, who shared game-changing insights on wealth transfer. Dr. Deans is the author of several best-selling books on family wealth and business succession. You can learn more about his work at his official website.
Let’s dive into his key points and show you how they can help protect your family’s financial future.
Understanding Wealth Transfer: Insights from Dr. Tom Deans
Navigating the transfer of wealth between generations is one of the most critical challenges affluent families face today.
Dr. Tom Deans’ presentation offered expert insights that can help safeguard your legacy. As we explore these video highlights, we’ll share our perspectives on ensuring a smooth and strategic transfer of wealth within your family.
What is Family Systems Theory?
Family patterns often dictate how wealth is managed and transferred across generations. Dr. Deans introduces the concept of “family systems theory,” revealing how behaviors, both constructive and destructive, tend to repeat within families.
Why this matters to you: Many baby boomers are mirroring their parents by neglecting proactive estate planning. This inertia could have serious repercussions for the generations that follow. By understanding these patterns, you can break free from them and create a more secure financial future for your family.
Your action plan: Take a step back and look at your family’s history with wealth. Are there patterns you’re unknowingly repeating? By identifying these, you can make conscious decisions to change course and create a more positive financial legacy.
Why Do Grandparents and Grandchildren Get Along So Well?
Dr. Deans humorously observes that grandparents and grandchildren often share a bond over their “common enemy”—the parents. This insight explores the tension that arises when parents impose their will on their children, particularly when it comes to managing inherited wealth.
What this means for you: These generational dynamics can significantly impact how wealth is perceived and managed within your family. By understanding these relationships, you can navigate potential conflicts more effectively.
How to use this knowledge: Foster open communication between all generations in your family. Create opportunities for grandparents to share their financial wisdom with grandchildren, while also ensuring parents’ perspectives are heard and respected.
What is a Family Meeting?
Dr. Deans emphasizes the pivotal role of family meetings in the successful transfer of wealth. He advocates for involving all family members in discussions about financial matters, starting from a young age.
Why it’s crucial for your family: Regular family meetings where financial topics are discussed can help younger generations appreciate and manage wealth responsibly. This approach ensures that wealth isn’t just handed down—it’s understood, valued, and preserved.
Your next steps: Start planning regular family meetings focused on financial matters. Include topics like budgeting, investing, and philanthropy. Consider involving your financial advisor in some of these meetings to provide expert insights and answer questions.
Where Does More Than 300 Million Dollars Go Every Single Day in Canada?
The scale of wealth transfer in Canada is staggering—over 300 million dollars are inherited daily, and this trend will continue for the next decade. Dr. Deans underscores the importance of recognizing this massive transfer of wealth as both a challenge and an opportunity.
What this means for your wealth: Without strategic planning, your family’s portion of this wealth transfer could be at risk. The sheer scale of these transfers means that proper planning isn’t just advisable—it’s essential.
How to prepare: Start by getting a clear picture of your assets and how you want them distributed. Work with a financial advisor to create a comprehensive wealth transfer strategy that minimizes tax burdens and maximizes the benefit to your heirs.
The #1 Fear Advisors are Warned About Is…
Financial advisors often face a significant challenge during intergenerational wealth transfer: maintaining client relationships when wealth passes to the next generation. Many advisors see decades of trust eroded when heirs choose new advisors or different strategies.
Why this should concern you: If your heirs don’t have a relationship with your financial advisor, they might make drastic changes to your carefully crafted financial strategy after you’re gone.
Your action plan: Involve your children and grandchildren in meetings with your financial advisor. This helps build trust and ensures continuity in your family’s financial strategy across generations.
We Don’t Know What We Don’t Know
Estate planning is often misunderstood as something only the elderly need to worry about. Dr. Deans stresses that it’s crucial for everyone, regardless of age, to be organized and informed about estate planning.
The wake-up call for you: Many people simply don’t know what they need to do when it comes to estate planning, which can lead to significant problems down the line. Don’t fall into this trap.
What you can do today: Start educating yourself about estate planning. Schedule a meeting with a financial advisor to discuss your estate plan, regardless of your age or the size of your estate.
Transitioning Assets That Are Hard To Divide
Dividing family assets such as cottages or businesses can be emotionally and logistically challenging. Dr. Deans discusses the difficulties families face when attempting to fairly distribute these hard-to-divide assets.
Why this matters to your family: Without clear planning and communication, these situations often lead to disputes and dissatisfaction among heirs, potentially tearing families apart.
Your strategy: Start discussions about these assets early. Consider all options, including selling and dividing proceeds, creating a usage schedule, or setting up a family trust. The key is to involve all family members in the decision-making process.
Is ‘Generation Skipping’ a Good or Bad Thing?
Generation skipping—where wealth bypasses the middle generation and is given directly to grandchildren—can have unintended consequences. Dr. Deans shares a cautionary tale highlighting the dangers of siloed communication within families.
The lesson for your family: Skipping generations without careful consideration and open communication can lead to significant problems, including potential resentment and financial irresponsibility.
Your approach: If you’re considering generation skipping, involve all family members in the discussion. Consider the potential impacts on each generation and seek professional advice to structure any wealth transfer in a way that benefits everyone.
The Importance of Writing a Will
Dr. Deans highlights a growing problem in wealth transfer: the increasing number of adults without wills. This trend could have significant consequences for how wealth is passed down between generations.
Why this matters to you: Without a will, your wealth could transition chaotically, leading to family disputes, unnecessary taxes, and assets being distributed against your wishes. This lack of planning can undo years of careful wealth accumulation.
Your action plan:
- If you don’t have a will, make creating one a top priority.
- If you do have a will, review and update it regularly, especially after major life events.
- Discuss your will with your family to prevent misunderstandings.
- Work with a qualified estate planning attorney and your financial advisor to ensure your will accurately reflects your wishes.
Remember, at Leyland & Matters, we’re here to guide you through every step of this journey. Together, we can ensure your hard-earned wealth becomes a lasting legacy for generations to come.
Ready to take control of your family’s financial future? Let’s talk about securing your legacy.
