Are your current advisors helping you create a vision for your wealth and its purpose?
You have worked hard to build, preserve and protect your wealth. You invested your time, your talents, your resources.
You’ve spent countless days and sleepless nights to provide for your employees, customers, clients, and most of all your family.
As a result of all of this sacrifice, you highly value your wealth because of this tremendous cost.
And yet, here is the paradox: Accumulated unearned wealth may ultimately allow your heirs to avoid all of the costs that brought value to your wealth in the first place. Is it any wonder that the average American inheritance is spent within 18 months?
What’s accumulated by a family over a lifetime is often dissipated by their children in less than two years.
Traditional Estate Planning
While it may take a bit longer than 18 months, high net worth families are not exempt from this phenomenon. Even with all of the best advisors, planning, resources, and a cadre of diversified investments, the average half-life of inherited wealth among the highest net worth families is 8 years.
That’s right, 8 years.
That would mean, for example, that a person who inherits $20 million would have, on average, just $2.5 million remaining after just twenty-four years.
What will be left?
Try this experiment:
1: Estimate the sum total of your net worth.
2: Divide that amount by your number of heirs.
3: Times that amount by 12.5%.
That is what the studies show, on average, will be left of your wealth to each of your heirs just one generation after your death if you follow the traditional model of estate planning.
This result is all too often exacerbated by traditional estate planning, which almost exclusively follows the four D model.
This model involves dumping the assets to the next generation, dividing them among the children, attempting to defer any taxes, and finally dissipating those assets within one or two generations at most.
It’s like building a roaring campfire, then trying to divide up the burning logs among all the people huddled around and expecting them to effectively care for, transport, and replicate that fire.
Too often, they end up burning themselves and taking the forest out with them.
Is your current team helping you to prepare your children for your wealth or only preparing your wealth for the children?It’s not just the structure that is broken in traditional planning. Traditional planning is asset focused and rarely takes into account the individuals, personalities, and unique dynamics of each family. It’s based on a linear way of thinking; that is, if transferring some wealth is good, it follows that transferring more wealth is better. It’s also tool driven, which leads most planners to jump to strategies that pass along economic capital without taking into account the individual’s or family’s far greater and far more valuable human capital.
Does your advisors talk to you about your assets and how to maximize transferring them or do they first ask you who you are, what you value, and what you believe?"In addition to being asset focused, linear, and tool driven, modern estate planning is generic. Many estate plans are written in third person, with the only personal information being an inclusion of the person’s name and sometimes the names of their children.
If you were to remove the first and last page of your estate planning documents, would you even be able to identify that it was your plan? Are you that generic? Is your family? Are your core values an essential part of your planning? If not, why not?"Because many people have learned to think of estate planning as a transaction rather than a relationship, they believe their estate plans are done. And yet, most of us would never say that our family is done. We’re constantly and consistently trying to educate and empower our family members. Families are constantly growing, learning, adapting, and developing, as is the ever-changing tax code. Why would the planning that supports your wealth be any different?
Is it any wonder then that:
Only 10% of HNW individuals say that their estate plan deals with their goals, wants and objectives.
Fifty-four percent (54%) of HNW believe their families would benefit from a formal set of principles to guide the purpose and meaning of their wealth, but only 10% have done so.
Seventy-five percent (75%) of high net worth (HNW) individuals say it’s important to leave wealth to their children but only 20% say their children are prepared to handle that wealth.
Less than half of HNW individuals say they have a clearly identified purpose for the use of their wealth or have even taken deliberate steps to use their wealth as intended.
Only 16% of the children of HNW parents say that their parents have educated them on wealth, only 15% have been offered any type of financial literacy programs and only 5% have been educated on the broader aspects of wealth.
Combine this with the fact that over the next 25 years, the baby boomer generation will transfer upwards of $40 trillion to the next generation, we have all the makings for a failed wealth transfer of epic proportions. If you were to sum up all of the statistics, studies, and analysis of financial wealth transfer today in two sentences, it would be this:
Undirected and unintentioned wealth is being transferred at historic rates by procrastinating parents, half of whom have no meaningful plan, and that wealth is going to unprepared heirs who have no idea what is going on when it comes to their parents wealth.
And, their financial professionals (attorneys, CPAs, and financial advisors) are doing little to nothing about it.
Planning with David York
I have spent more than 20 years discovering what works, and what doesn’t, when it comes to effective, impactful and sustainable wealth transfer. Over that period, I have worked with over 7,000 clients, including billionaires and business owners, celebrities and sports figures, and entrepreneurs of all shapes and sizes.
I have represented first generation wealth creators, sixth generation wealth maintainers, and everything in between. I have also worked with individuals, couples and families across the wealth spectrum as well as countless non-profits looking to make a difference in an all too broken world.
Early on, I began to see common traits and characteristics of those who both make positive impacts in the world and who successfully transfer wealth, intentionality and purpose to the next generation and, sadly, those who fail to do so, often with tragic results.
My desire is to fundamentally change how HNW individuals view wealth transfer and to change these statistics. I am ready to help you and your existing team bring purpose to your planning and help you build a legacy that lasts.
Pulling from my experience, expertise, and passion, I can help you navigate the complexities and options when it comes to wealth transfer and help you get to the peace and freedom that comes when your planning is aligned with your purpose and when you have a plan that entrusts and empowers the next generation.
"A fantastic approach to estate planning that brings in the technical pieces and--more importantly--the relational pieces."
"David gets it! He is honorable and authentic and pragmatic. Very helpful. More people need to hear him."
Individuals and Families
Single Family Offices
Professional Advisors and Advisory Firms
National Banks and Trust Companies
Wealth & Legacy Planning
I can help you, your family, your team and your organization in any of these ways:
You would never invest in a business without knowing what it was trying to accomplish, the needs it was trying to meet, what its core values are, who it was seeking to impact, and how it sought to change the world. And yet too many HNW individuals invest their entire net worths in estate plans that don’t seek to address any of those questions. Through Entrusted Planning, a company I co-founded with Andrew Howell, we have developed a simple yet powerful process that, with a six hour commitment of time on the part of you and your family, can help you understand exactly where you are as a family and exactly where you want to go. Once you have a map and a compass, your planning actually becomes simple, easy, and implementable now.
Translation and Review
Most HNW individuals already have amazing teams of professional advisors. That said, too often they are inundated with strategies, structures and techniques that they don’t understand and don’t know how to assess. I work with many of these people to help them clearly understand their current planning and the current pros and cons of that planning. I can then can offer suggestions, options and alternatives employed by some of the wealthiest people in the world to achieve their unique goals, values, and objectives. I can also work on a consulting basis directly with a client’s existing advisors to ensure that their purpose aligns with their planning.
Families are the most successful when it comes to wealth transfer when it is done relationally. The best estate plan in the world can never be more than a skeletal system. While it may help to hold and support wealth, it is the people and relationships of the family that become the heart and the soul of any plan and that will ultimately determine the success or failure of your wealth transfer. I work with families to help them understand the power of unity in diversity by helping to understand what makes each person unique and where a family can agree and concentrate their efforts and resources.
Cutting Edge Planning
We live in the golden age of estate planning. There are more tools, options, and structures available than ever before. Whether its private trust companies, purpose trusts, dynastic trusts, opportunity based planning, low-profit limited liability companies, or any of a host of other unique planning options, I have the experience and background to bring you the latest, most advanced planning in ways that are clear, understandable, and impactful.
Contact me to see how I can help you bring purpose to your planning.
I would be happy to talk with you, help you fully understand your current planning and how it works, and then give you practical and actionable suggestions on how you could bring purpose to your planning and greater intentionality to your wealth.