There are many reasons why a wealth owner may be unable to make important decisions regarding his or her portfolio.
Death is the most obvious reason; time waits for no one. According to the latest statistics from the World Bank, men in high-income countries live until around age 80 on average and women for a few years longer.
Medical, psychological, or legal hardships can also lead to temporary incapacitation. Harvard Medical School researchers found that one out of every two people will develop a mental disorder during their lifetime. Among men, the most common such disorders include depression and alcohol abuse.
While such scenarios are not pleasant to consider, almost all UHNWIs will find it even less pleasant to imagine that an adverse event affecting their own lives could lead to financial hardship for loved ones and a sub-optimal legacy. To minimise the likelihood of these negative consequences, UHNWIs should ensure that they build strong “legacy guardrails” of three types:
Elevate Your Wealth Game: Empowering UHNWIs for Simplified Asset Management. Altoo Platform Preview
01 Structures and paperwork
Trusts, wills, death and disability insurance policies, and other estate planning building blocks are often complex – but UHNWIs will typically rely on trusted advisors to handle the legwork when it comes to putting this important paperwork together.
Here, the most important thing for UHNWIs is to devote proper time and attention to articulating their unique goals and vision for the long-term future, first to themselves and then to their advisors. Their wealth is a tool for realising this future. Their advisors will provide recommendations on how to safeguard this tool and ensure that it is used for the intended purposes.
Of course, it is also important to listen to advisors and take appropriate action. Like everyone, UHNWIs will likely prefer not to think about losing their lives or control of their finances. Thinking beyond oneself, however, is essential for true legacy building.
02 Relationships
During their lifetimes, a shared set of family values is perhaps the most important long-term asset protection tool UHNWIs can give their heirs, and strong relationships are the best mechanism through which this tool can be transmitted. They take time to build; ongoing communication is essential.
Formally documented approaches to topics like wealth management, conflict resolution, and philanthropy can help – but no document can cover every single eventuality the future may hold. When heirs must inevitably make judgment calls, agreement on “what aligns with the family’s goals here” is likely to be their most valuable decision factor.
03 Informational continuity
While not all UHNWIs may be involved in the routine aspects of managing their wealth, they all play a key role in ensuring that all stakeholders have appropriate information.
Wise UHNWIs will avoid making themselves single points of failure in wealth information flows. Well-communicated legacy goals, well-written wills, or well-designed contingency plans will be of limited benefit to stakeholders who must scramble – especially in times of uncertainty or grief – to locate records, account statements, and other day-to-day administrative necessities.
In the modern age, an advanced digital wealth monitoring and reporting solution like the Altoo Wealth Platform is an ideal tool for ensuring that advisors, family members, executors, and agents have the information they need to efficiently act in accordance with a UHNWI’s wishes – even if he or she is unable to personally connect the dots.
The platform automatically consolidates, analyses, and visualises data on all of the assets in even the most diversified portfolios. It also features secure digital messaging and file storage with customisable access privileges to ensure that the right people can easily view and understand the right information at the right time.
We look forward to demonstrating how the platform can give you peace of mind that your wishes for your loved ones will be carried out effectively, even in circumstances where you are unable to provide direct guidance. Please contact us to learn more.
