Banks are necessary to protect our wealth and valuable possessions. Most of us have a bank account, in which we keep cash, bonds, and possibly valuable items like jewelry. These vaults and lockers are used to safeguard our wealth.
They also serve as a safety net. They are available when we have money to buy anything. Affluent families also preserve their wealth on a larger scale. Wealth is acquired over the generations. They must transfer their wealth to younger generations.
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This plan needs to be in place. This policy is not the vault and lock policy. Families must create trusts that ensure the funds are available to beneficiaries on a specific date.
You also have to protect the property and real estate from creditors as well as manage inheritances. Family members must take care of taxes, arrange insurance, and manage guardianship matters.
These financial issues require that families hire a family manager to manage their family's finances. This concept was used by wealthy merchants in the United States and Europe. It has become a way to manage wealth for super-rich families.
Family offices (FOs), in some cases, may employ two to three people to manage daily tasks. Some family offices (FOs), on the other side, will employ 10-20 professionals to make investment management decisions.
A manager will assist the family in developing an investment strategy to protect their assets. They will be guided by the manager regarding risk and return on assets. These steps are beneficial for families that have accumulated wealth. These measures also protect the future interests of the next generation.
A family office ensures that each generation of the family transfers its knowledge, wealth, and stewardship to succeed.