Preserving wealth across generations requires more than a will. We examine the structures that high-net-worth families use to protect and transfer assets.
The transfer of wealth between generations is one of the most consequential financial events a family will face. Yet it is also one of the most frequently deferred. Research consistently shows that a significant proportion of high-net-worth individuals have not put in place the structures necessary to ensure an orderly and tax-efficient transfer of their assets.
A will is the most basic instrument of estate planning, but it is rarely sufficient on its own. For families with complex asset structures — spanning multiple jurisdictions, business interests, real estate, and investment portfolios — a will addresses only a fraction of the planning required.
Trusts remain one of the most versatile tools available to high-net-worth families. A discretionary trust, for example, allows assets to be held for the benefit of a class of beneficiaries without those assets forming part of any individual's estate. This provides both asset protection and flexibility in distribution, while potentially reducing exposure to inheritance taxes in relevant jurisdictions.
Family investment companies (FICs) have grown in popularity as an alternative to trusts, particularly in jurisdictions where trust law is less developed. An FIC allows a family to hold investments within a corporate structure, with shares allocated to family members in a way that reflects both current ownership and future succession intentions.
For families with significant business interests, a holding company structure can provide a clean separation between operating assets and investment assets, simplifying both governance and succession planning. Combined with a shareholders' agreement that addresses decision-making, dispute resolution, and exit provisions, this structure can significantly reduce the risk of family conflict disrupting the business.
The most effective intergenerational wealth structures are those that are reviewed regularly. Family circumstances change, tax laws evolve, and the assets themselves may grow or shift in character. A structure that was optimal ten years ago may no longer serve its intended purpose today.
The conversation about intergenerational wealth is ultimately a conversation about values as much as vehicles. The families that navigate it most successfully are those that engage the next generation early, communicate openly about expectations, and build structures that reflect not just financial objectives but the family's broader legacy.