Dear David,

We are in the process of updating our wills. Our grown children now have families, and we’re concerned about protecting our family wealth, particularly since two of our children are in unstable relationships with their spouses. We’ve worked hard to build what we have, and want to make sure that our assets are ultimately passed on to our children and grandchildren. Are there strategies that help keep property and money within the family if a marriage ends? – KEEPING IT IN THE FAMILY

DEAR KEEPING: This is a common concern for families after a lifetime of building equity. Many people worry about protecting their family wealth, but many also fail to plan for it. Fortunately, there are tools that can help you keep your hard-earned assets in the family.

One of the most powerful tools at your disposal is a testamentary trust, which is created through your will and activated after your passing. This type of trust can hold money, property, or investments for your beneficiaries, instead of transferring ownership to them directly. Because the assets stay within the trust, they are significantly better protected from future marital breakdowns and other claims.

You might also consider an inter vivos (living) or family trust, which can be set up while you’re alive. A family trust can provide flexibility and control, allowing you to manage distributions, protect assets, and even achieve certain tax planning benefits.

For families with real estate or business interests, establishing a corporate or property ownership structure (such as a family holding company or partnership) can add another layer of financial protection. This type of arrangement can help ensure your family assets remain under controlled management, rather than being divided if a marriage dissolves.

Keep in mind that trusts and corporate structures do come with ongoing costs and tax considerations. There will be accounting and legal fees, and in some cases, there may be  annual reporting requirements. If your goal is to keep your wealth within your bloodline, these expenses are simply the cost of doing business.

Because every family and financial situation is unique, it’s wise to work closely with your accountant, your estate lawyer, and a financial planner who specialize in intergenerational wealth protection. These experts can design a plan that is tailored to your family’s needs, and help you control how your legacy is passed on during and after your lifetime.PRO TIP: Protecting your family wealth requires more than just a will, it takes a plan – and the sooner you start, the better. By taking action now, you can help ensure your equity stays in the family for generations. #Advice #AskDavid #TheNegotiator