As families grow in size, wealth, and complexity, they often need to identify a new accountant, estate attorney, or financial advisor.

Depending on the family this could mean something common like shifting from TurboTax to a CPA firm, or something more specific such as finding an experienced estate attorney for special needs trusts.

But no matter how common or complex your need may be, these are important decisions that require careful due diligence.

Do not rush. The impetus for an upgrade to your family’s “team” is usually a significant family event. An unexpected illness may lead to updating the estate plan, or a big tax bill may lead to looking for ways to reduce income or increase deductions.

While speed may be important, do not hurry and pick the first firm you meet. Take your time and follow some practical steps. A good process will help lead you to a good outcome.

The most valuable asset

a wealthy multi-generational family can have

is a collaborative team of family members

and advisors to support them.

STEP 1: Get Organized

Regardless of what type of advice you need, the better organized you are, the more you will benefit from your upgraded team.

If you can provide any prospective attorney, accountant, or other advisor with these items, your early discussions with them will be more valuable and comprehensive:

1. A Family Tree. Include all the members of your extended family, living or recently deceased, along with other relevant information such as the state where they live, their spouses’ names (or former spouses’ names), dates of birth, etc.

2. List of Entities. These may include trusts, retirement plans or pensions, charitable entities (donor advised funds or private charitable foundations), life insurance, real estate, etc. Include specific details such as whether these entities are owned individually or jointly, received through gifts or earned, part of a marital estate, and so forth.

3. Balance Sheet. Approximate market valuations are helpful, along with cost basis, including any tangible personal property such as coins, collectible cars, or artwork.

Conversations with potential team members will be more productive if this information is provided. You will better differentiate whether an accountant’s or attorney’s expertise is aligned with your unique circumstances.

Depending on the sort of advice you need, additional information may be requested. An attorney will want to see copies of existing estate plans. An accountant will want to see your tax returns from the prior two years.

STEP 2: Identify Possible Experts 

Being your selection process by identifying the characteristics you like or dislike about your current advisor. If you do not have a current attorney or accountant, consider what you value in an expert (proximity, particular expertise, etc.).

One thing to consider is the size of their organization. No advisor is an expert in everything. A practice with multiple professionals provides additional resources for expertise.

Succession planning is also important. While a wise old veteran may appear attractive, you may want a younger accountant or attorney who will still be working long after you are retired. Ask questions about their team and how information will be stored and accessed by other professionals in the future.

Meanwhile, go ahead and ask for cost information. Professionals have standard rates at which they bill. Many work by the project. An attorney, for example, will often indicate the typical cost of drawing up a will, trust, or powers of attorney for property and healthcare.

Ask friends or members of your community for introductions to experts with good reputations. Your attorney may be helpful in finding an accountant, or your accountant may know respected local attorneys. Financial advisors also can be a good source of information.

STEP 3: Interview

While identifying the right skill set is important, it is also helpful to find professionals with whom you are likely to develop a good working relationship. Prepare yourself for at least three in-person or video meetings.

Ask a family member, close friend, or another advisor on your family’s support team to participate in the meetings. Having an extra set of eyes and ears can be helpful, and one person can take notes to refer back to after the meetings.

Interviews will help increase the chance of finding a good long-term fit for your needs. Plus, you may get valuable free advice, especially if you provide your family tree, list of entities, and balance sheet prior to the meeting.

Ultimately, picking a professional for legal, tax, investment, financial planning, or other advice is your responsibility alone. If an expert comes “recommended,” ignore the testimonial until you have done your own research and due diligence. Recommendations may be an indication of conflicts of interest, such as people who recommend their friends, or organizations that have reciprocal relationships. Caveat emptor.

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Final Thought 

Most wealthy families focus their efforts on maximizing investment returns, yet performance is often a difficult objective to achieve consistently. Families should start by building a high-functioning team of professionals to support their needs. Over the long term, solid legal and tax advice can trump investment returns.

While Conifer Bay Capital does not recommend accountants, attorneys, or other experts, we work closely with wealthy families to implement expert advice. We also encourage families to periodically include their tax or estate experts in family meetings to promote financial literacy among their heirs.

For additional information, or for thoughts on your unique circumstances, contact us.

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June 8, 2021