Below are three types of family situations that we commonly work with.
Sudden wealth: A recent sale of a business has left this family struggling to deal with the issue related to their new wealth
Complex affairs: A second generation wealthy family is challenged to effectively manage all the details of an increasingly complex set of family businesses
Time challenged: A busy and successful executive needs help managing the wealth that she and her family are accumulating, as she doesn’t have the time to devote to it
Click on the tabs below to see a case study of each type.
“Now we have a lot of liquid wealth, but we don’t really have a clear idea of what to do with it. We would like to have a coherent strategy in place and make sure it is properly implemented.”
Peter and Mary Hall*
Peter and Mary Hall have always lived quite modestly, but they recently sold their business for $50 million. Unaccustomed to such wealth, they have limited knowledge about investments and are unsure how to proceed. Used to managing a business, rather than the proceeds of a large sale, they know they must protect their new-found wealth, invest it wisely and save on their taxes as well. The family is small, just Peter and Mary, both in their fifties, and their two children, in their early twenties.
*Names have been changed to ensure confidentiality
The Northwood Approach
- A comprehensive review of the family’s financial situation as well as their goals and objectives
- Tax planning and income splitting opportunities with their two children and the use of a family trust
- An investment management approach that allows the Halls to be comfortable and confident, including a mix of investments that will meet their long term goals
- Financial and wealth management education for the children
- A review of charitable goals and a resulting structure that is efficient and easy for the Halls to manage
The Hall family is secure in the knowledge all of their affairs are being managed through one team dedicated to their needs. In addition to helping them manage their finances, Northwood also advised the Halls as they built a family cottage, consulted with them on initiating family meetings and set up comprehensive insurance structures to protect their wealth in future years.
“We now feel secure that our money is being managed expertly and that we’re getting the right advice to help us to educate our children about the wealth they will inherit one day and how to be wise stewards of that legacy.”
“Our businesses and our other investments seem to be a collection of unrelated and disorganized components, and I’m not sure those investments are doing what they need to. They are not part of any cohesive and strategic plan.”
The Peterson Family
The Peterson family is the third generation of a wealthy family (net worth of $350 million) increasingly frustrated and overwhelmed by the growing complexities of their business activities and investment holdings, which were largely established by their grandparents. This large family, with four adult children living and working both in Canada and abroad, owns a number of different manufacturing businesses as well as multiple private equity investments. They don’t feel as if they understand or control these complexities effectively, and they worry that important details are falling through the cracks.
The Northwood Approach
- A broad strategic review of all the businesses resulting in a clear set of goals
- Streamlining and improving the complex family business structures to be tax efficient, meet the goals established, and make management easier for the family
- Formalizing inheritance objectives and setting up trusts for the children
- Establishment of a regular communication process with all family members to ensure consistency of information received
- A long term succession plan to deal with business and family holdings when key events occur
The Peterson family feels reassured that all of their affairs are being managed more effectively, both in terms of business structures, investments and complex family interrelationships.
“Now we have a much clearer overview of how our businesses contribute to our overall family wealth. We know that Northwood really understands all the complexities and we have confidence in their ability to manage all the details.”
“There are so many things to think about and decisions to sort out. But I don’t have enough time to devote to do it properly. I worry that I am leaving money on the table because I’m missing opportunities to maximize our net worth.”
Sarah and Murray Tevalas
Sarah Tevalas is a senior partner with a major investment banking firm (net worth $12 million). Her husband Murray is a dentist with a thriving practice. Her job is her passion and she devotes herself to it fully. What little spare time she has she devotes to her husband and growing family of teenagers and to their sports passions of golf and skiing. What worries her is the lack of time she has to devote true attention to her financial affairs, investments, stock options, and taxation issues. Sarah and Murray came to Northwood looking for advice, and the kind of time and attention devoted to their affairs that their demanding jobs didn’t allow.
The Northwood Approach
- A complete review of all compensation programs, including stocks, options, pension plans and a long term strategy to deal with concentration issues, as well as timing of exercising of options to achieve family goals
- Advice and counsel on the Tevalas family investment portfolio and a new approach to evaluation that fits the time that Sarah has to devote to her affairs
- A review of the family’s overall tax structure and implementation of a family trust to help split income and provide for the children over the long term
- Redrafting of wills and powers of attorney to reflect the changes made above
Sarah and Murray Tevalas can concentrate fully on their jobs and family, secure in the knowledge that Northwood is efficiently managing all the other aspects of their financial and family affairs. They have the confidence that they will be able to retire with the kind of income that will protect their family and allow them to pursue their personal passions.
“I have the confidence that Northwood is devoting the time we don’t have to manage our affairs expertly and ensure our net worth will be able to fund all the things we want to do.”