Preparing for the Legacy Assessment

Why preparedness is so important

​In the United States, planning related to the death of a principal often focuses on navigating the complicated issues associated with transfer taxes. In addition to vitally important tax planning, the family office and its advisers should look beyond solving for potential tax burdens to address additional contemplated consequences of the principal’s death.

Issues to consider include the other financial implications of a principal’s death, potential challenges and considerations associated with the disposition of specific assets, the need for a clear articulation of philanthropic goals and objectives, and development of transition/succession plans for the family’s enterprises, including the family office.

In the absence of addressing these other considerations, effective tax planning results may upend other equally important outcomes—and that is when surprises happen.​

Back to top

Explore the Legacy Assessment interactive

While death and taxes are inevitable, their consequences do not need to be a surprise. Family offices are in a unique position to prepare their organization and the families they serve to plan for the inevitable.

Learn more from our legacy assessment interactive to better understand what family offices should consider to prepare the high net worth families they serve.

Back to top

How family offices and advisers can prepare for the inevitable

Preparedness exercises seek to put the family office, the family advisers, and most importantly, the family, in a significantly better position to address the implications of the death of a principal. The exercises identify gaps in knowledge, documentation, staffing, and other areas that are best addressed while the principal is alive, as well as mapping out the key steps to be addressed following the death of the principal.

Since no two families are alike, the exercises are tailored to the family’s specific circumstances. They should touch upon relevant items relating to the principal, including:

• A 90-day drill to identify necessary financial, accounting, legal, regulatory, and administrative action items to address immediately following the principal’s death
• Financial implications of the death, including potential expenses, liabilities, and taxes, as well as identifying sources of liquidity to pay for them
• Analysis of issues related to disposition of specific assets
• Developing a transition plan for the family office, often accompanied by a Family Office Transformation Lab, which helps address changes that inevitably come about in the wake of a principal’s death

Family offices and family advisers who have the foresight to conduct these exercises can create significant value for the family by reducing confusion and providing stability during a difficult time. It is otherwise a missed opportunity to prepare for and systematically attend to important details following the principal’s death.

Back to top