From NASDAQ by DAWN ALLCOT on April 9, 2024
The Great Wealth Transfer could put more than $80 trillion in the hands of younger generations over the next two decades. But, for a variety of reasons, many baby boomers — especially the very wealthy — hesitate to pass their financial legacy onto their children.
Some wealthy boomers are distributing their inheritance, as it were, while they are still alive. “If the wealth-generators, for lack of a better word, are still around as resources for their kids, the kids aren’t just flying blind at that point,” Joe Farren, President and partner at Aquilance, previously told GOBankingRates.
But there’s another option for wealthy business owners to provide money to their heirs, while maintaining some posthumous control over how it’s spent: An entrepreneur’s trust.
What Is an Entrepreneur’s Trust?
An entrepreneur’s trust is a financial account that gives heirs access to capital that allows them to take business risks, start their own company, or provide venture capital for other companies while receiving mentorship from an experienced trustee.
The goal is to foster a spirit of entrepreneurship while providing a sense of empowerment to heirs, without running the risk they will waste the money or rest on the laurels of the family’s legacy. An entrepreneur’s trust provides a balance between enabling heirs to spend their inheritance as they see fit and ensuring they are good stewards of the money.
Is an Entrepreneur’s Trust Right For Your Family Wealth?
A trust provides asset protection for generational wealth and helps with estate planning. You may not need to consider starting a trust unless you have assets worth more than $10 million, according to Dominion.com.
At that point, according to the firm’s website, a trust opens up premium investment options, and tax mitigation strategies, making the time and expense of establishing a trust worthwhile.
An entrepreneur’s trust is a specialized trust that can be customized to fit your family’s needs. You’ll gain more than asset protection benefits. You’ll be able to empower future generations to maintain and continue to grow your family’s assets, potentially bucking the third-generation curse that befalls 90% of wealthy families.
About Aquilance
Aquilance was founded in 1987 to address the complex financial administration needs of families and individuals of wealth. Currently serving hundreds of families, Aquilance provides a diverse suite of services which includes personal bookkeeping and billpay, consolidated accounting across multi-entity family structures and complex investment partnerships, performance reporting, ILIT administration and much more. The firm’s mission of over thirty years continues to be enriching quality of life for families by eliminating time spent on managing complex finances, and empowering effective decision making and legacy planning by delivering timely and accurate reports to clients and their advisors.
Media Contact:
Ryan Walker
R.J. Walker & Co.
ryan@rjwalkerco.com
