When Michael, a successful entrepreneur, approached an investment advisor to help create generational wealth, he was focused on building a legacy that would support his children and grandchildren for years to come. The advisor began by assessing Michael's current financial situation, including his business interests, investments, and assets, and then developed a strategy to preserve and grow wealth over multiple generations.

Here are the key steps we took to help Michael be successful:

Developing a Comprehensive Wealth Strategy:

  • Assess current assets, income, and long-term goals to create a multi-generational wealth plan.
  • Recommend a diversified portfolio focusing on growth assets (e.g., stocks, real estate) with a balanced risk profile for long-term sustainability.
  • Create a financial strategy, including capital preservation and growth, to ensure wealth can be passed down effectively.

Tax-Efficient Strategies:

  • Advise on utilizing tax-advantaged accounts like RRSPs, TFSAs, and family trusts to minimize tax exposure and maximize wealth retention.
  • Help design strategies for tax-efficient wealth transfer, including gift splitting, using lower tax brackets for heirs, and minimizing estate taxes through strategic withdrawals and donations.

Establishing Trusts and Estate Planning:

  • Set up family trusts to protect assets, reduce estate taxes, and direct wealth to future generations according to the client’s wishes.
  • Work with legal and tax professionals to ensure the trust structure aligns with the client’s long-term goals, including succession planning for family-owned businesses.

Life Insurance and Legacy Planning:

  • Recommend life insurance to provide liquidity to heirs for estate taxes and other immediate financial needs.
  • Implement charitable giving strategies, where appropriate, to reduce tax liabilities and create a philanthropic legacy.

Financial Education and Family Involvement:

  • Educate family members about financial planning and wealth management, ensuring they can responsibly handle inherited wealth.
  • Facilitate family meetings to ensure everyone is aligned with the family’s financial values and legacy goals.

Ongoing Monitoring and Adjustments:

  • Regularly review and adjust the wealth plan to reflect changes in market conditions, family circumstances, or tax laws.
  • Ensure the strategy remains relevant across multiple generations, adjusting the portfolio and planning as needed.

By implementing these strategies, we helped Michael build a legacy that supports financial security for multiple generations while minimizing tax burdens and protecting wealth for future heirs.