Boomers, Gen X, Millennials and Gen Z: No matter where an individual sits on the family tree, they all need to be planning — together — for the inevitable death of a family member.
When an individual loses a parent, sibling or child, there are so many emotions at play. Few people even have the capacity to even think about estate affairs. They need time to reflect, grieve and heal; and yet, the bills must be paid, life insurance claims must be filed and inheritances must be sorted. For some families, a multi-family office can be beneficial. The family office team can help family members cope with the tangibles and intangibles before, during and after significant life events.
Preparing for death and facing its aftermath are among life’s most uniquely challenging moments — when complex legal requirements collide with intensely personal decisions and responses. Multi-family offices, which manage the legal and organizational intricacies of estate settlement, can guide families through the six steps of this highly personal process.
Step 1: Consulting with Legal and Financial Experts
This first step can be both the simplest and the hardest: contacting an attorney and a CPA. It may require only one short phone call, but even that can seem impossible when family members are in shock or despair. A multi-family office can act as the trustee, executor or advisor or simply as an administrative team.
Step 2: Locating Critical Paperwork
If an individual or family has a prior relationship with a multi-family office, the office will most likely have their will, trust and other legal documents on file. If not, the multi-family office team can begin the process of locating and verifying those documents well as identifying trustees, beneficiaries and heirs while the individual or family tends to more personal matters. A multi-family office can track down outlying assets and papers, such as a military discharge or marriage certificate, and they’ll manage the many legal forms required for complex estates. Every item in the estate should be secured, inventoried and properly distributed.
Step 3: Managing Everyday Business
In this stage, a multi-family office can ensure bills are paid, appointments are canceled and all pending items on an individual or family’s checklist are processed, down to that credit still owed at the country club.
Acting with the legal authorization of the estate trustee, a multi-family office can file insurance claims and close out accounts in the name of the deceased, while also checking off the minor stuff, like notifying the personal trainer or rescheduling the dog groomer.
Step 4: Overseeing the Allocation of Assets
After resolving debts and establishing the full scope of all financial accounts and other assets, a multi-family office can manage the distribution of personal property — anything from who gets granddad’s favorite rocking chair to how multimillion-dollar assets will be divided, including vacation houses and art collections. In addition to making sure the income and estate taxes are paid, a multi-family office can help facilitate family interactions at these tough times, sensitively but methodically executing the instructions of the trust instrument while ensuring everyone understands the outcomes.
Step 5: Finalizing an Estate
You may have heard that it can take years to fully settle an estate — and that if even one item is overlooked or mishandled, it can cause months of delays. This is all true.
Even if a trust was established before death, there are courts involved, and settlement is almost always a drawn-out process. On average, it takes nearly 600 hours and more than 16 months to settle an estate. However, a multi-family office can help lighten this burden so that family members don’t have to put their lives on hold trying to figure out whether Form 709 comes before or after probate notifications.
Step 6: Preserving Family Inheritance
This final stage encompasses the ongoing administration of family legal and business affairs as needed. Clients are often surprised to find that closing the estate doesn’t necessarily give them personal closure. Inheritance can be complicated. An individual’s life has been disrupted and they might not know how to manage new wealth, or they might be feeling certain pressures from other family members. Perhaps the person who inherited their father’s mint-condition 1958 Corvette has no space or use for it. Maybe their sister is upset that someone else was given the pearl earrings she wanted.
A multi-family office can provide support to beneficiaries, who may have inherited assets they’re not sure how to handle. They can help newly minted decision-makers with stewardship of family assets and take the worry out of investing, so family members can move securely into this new phase of their life.