Bloodline Wealth Opportunities In Place
Incredible Result: “I don’t want to just protect my Family. I have created long term business and personal opportunities for them.”
Avoidable Train Wreck: Bloodline wealth opportunities wasted.
Main Play: The Family Bloodline Opportunities Trust
What This Is: Your Company, investments, life insurance and vacation home will be owned, used, invested, preserved and grown to promote family harmony, entrepreneurship, education, and responsibility and protected against potential lawsuit, creditor, spendthrift, bankruptcy, divorce or substance dependency issues.
Those Family Business Pioneers who have worked hard to build a family, to build a Company and to build other wealth are usually highly motivated and are very careful to preserve and protect what they’ve built.
Often, however, not all of their children have the same capabilities or exhibit the same drive to preserve, protect and build. Their grandchildren may be even less likely to preserve, protect and build.
Sudden Wealth Syndrome
While the popular story is rags to riches, the frequent full story is rags to riches to rags in two or three generations. Psychologists, in discussing “Sudden Wealth Syndrome”, explain that heirs, like lottery winners, have a tendency to lose their inheritance. The statistics show that 65% of family wealth is lost by the second generation and 90% is gone by the third generation.
This is not a new phenomenon. The Biblical story of the Prodigal Son shows us this problem has existed for at least 2000 years. This is something known today as “affluenza”, where the offspring of the wealthy pursue instant gratification and lack purpose or self-esteem. (Often overlooked is the related impact, known as “Elder Son Syndrome”).
The founders of a family business may or may not be successful in instilling in their offspring the same capabilities which created their wealth in the first place.
And even if your children and grandchildren are extremely responsible, life happens. Bad things happen to good people. The unexpected happens to good people.
Ok, so let’s win, for the good of our family. The Bloodline Planning Trust helps the business owner win – for the benefit of his or her family.
The Bloodline Opportunities Trust is enabling Family Business Pioneers across the country to help preserve, protect and grow their wealth for the benefit of successive generations.
The Family Bloodline Opportunities Trust
The Family Bloodline Opportunities Trust (which can operate as a “Family Bank”) has “family bank” features, which is providing an incredible opportunity for Family Business Pioneers to preserve, protect and grow their family’s wealth.
The biggest reason family fortunes are lost is because those who built the wealth haven’t provided clear guidelines, protections and controls for handling the wealth they leave to their loved ones. This can lead to family fights and disagreements, uncontrolled use, bad investment strategies, bad business decisions and the resulting loss of family wealth or the family business.
Even if your children and grandchildren are mature and careful, life’s events still pose risks to the wealth they are given during your life and to the wealth they inherit upon your death. This may arise from business ventures that impose personal liabilities, divorce, lawsuits, substance abuse or dependency problems and misjudgments.
The Bloodline Opportunities Trust is a remarkable power tool being used to overcome these issues. By placing family wealth into a Bloodline Planning Trust (either during your life or at your death) this can be set up to last for as long as you would like. Under the careful direction of a professional trustee, family wealth can be carefully grown and used for both the short term and the long term benefit of your family.
What Does The Family Bloodline Opportunities Trust Own?
The Family Bloodline Opportunities Trust can be set up to own some or all of the following assets:
- The Family Business. By placing future Company ownership into the Bloodline Opportunities Trust, you can enable the Company decision-making to be made by the family representatives you appoint or by a professional trustee. Other features:
– The Trust can own all or part of your Company or affiliates or the real estate to be leased to the Company.
– Family members active in the Company could hold controlling shares or minority shares in your Company.
– The Trust can be authorized to loan funds to your Company to work in sync with the Company’s bank financing and bonding.
- Your Life Insurance. The Trust can be set up to own and receive your life insurance to be used for your family or your business (in collaboration with your professional Insurance Advisor).
- Family Investments. By holding some of your family investments in the Trust, you have the opportunity to specify how you want your family wealth to be preserved, managed and used to help achieve your family’s life long hopes and dreams. Features include:
– The Trustee can be authorized to pay for specific family needs, such as health or education or a downpayment for a home.
– Just because your children don’t want to own or work in your business doesn’t mean they don’t want to go into business. The Trust can provide equity or loans to a business started by your heirs to work together with other bank or equity funding.
- The Family Vacation Home. This can help parents and grandparents to ensure that the special home (vacation home, cabin, ranch, beach house, condo, etc.) which you want to continue making memories for the family can successfully be passed on and maintained within the family by succeeding generations. This typically includes the following features:
– Guidelines to address the decision-making, scheduling and expenses of the vacation home and divorce and liability protection, as well as guidelines for future purchase and sale of ownership interests by one or more family members and for future trust termination options.
– The Trust can hold the home itself or the home can be held in an LLC owned by the Trust. The family (children, grandchildren, great grandchildren, etc.) would be named as beneficiaries of the Trust. They would be entitled to use the vacation home but would not have any direct ownership of the vacation home (or the LLC).
– A funding mechanism, such as a Vacation Home Endowment Fund, funded by either a share of the parents’ estate, a life insurance policy, or a dedicated investment fund established by the parents.
– Investment management and banking guidelines for managing the Vacation Home Endowment Fund.
The Family Retreat
As parents, we all seek “teaching moments” for our children. The business owners I work with often ask if I will meet with them together with their children at a Family Retreat. This is a program where we teach their adult and young children about the “Sudden Wealth Syndrome” pressures they face and where we discuss their parent’s or grandparent’s game plan for helping to overcome this. Most recognize this is being done with love to provide long term care and protection.
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