Facilitating Difficult Conversations & Building Meaningful Relationships With Younger Generation Family Members
- In this case, over the years, we had worked with the two adult second-generation family members of a long-time client family to help them develop financial literacy.
- There were various family trusts in place created by parents and grandparents for the benefit of (grand)children and future generations.
- As the children became engaged to be married, the parents understood the importance of premarital agreements but also wanted to build positive relationships with their children’s new spouses and avoid difficult conversations at the onset of the important family life event.
- Colony introduced the topic of prenuptial agreements: how they benefit the bride and groom, and how the decision to execute or not execute a prenuptial agreement could impact their future financial options – either related to the terms of the existing trusts, or in general.
- The advisor educated the couple on the basics of prenuptial agreements, reasons to and not to execute them, and the pros/cons of doing either.
- The advisor worked with the attorneys representing each party, helping to coordinate the different disclosures of information as well as outline key decisions.
- Because Colony spearheaded these conversations, the family could enjoy the excitement of wedding planning without the stress of tense family dynamics over these issues. Further, the bride and groom were empowered to make their own financial decisions and grow their working relationship with their Colony advisor.
Efficiency Created Through Document Portal
- Colony works closely with accountants and attorneys for each family, frequently sharing sensitive legal and tax documents.
- We use a document portal that allows for secure file sharing.
- This client historically compiled all necessary tax documents for annual tax preparation, emailing or dropping off the information with their accountant.
- As they transitioned to working with Colony, we worked with the previous advisor to obtain all 1099s, K-1s, and any other tax forms associated with their investments.
- Colony compiles and shares all tax-related documents with their accountant through our secure portal each year creating efficiencies for the CPA and removing the administrative burden from our client.
- Additionally, Colony receives estimated tax payments, filing extensions and returns for filing via our secure portal from our client’s CPA and timely processes payment on their behalf.
Asset Allocation Clarity with Customized Reporting
- Our robust reporting platform and online portal include a clear reflection of liquid and illiquid assets, owned both directly and indirectly, such as through a Family Limited Partnership.
- While looking through to the underlying assets, our reporting can also aggregate from multiple custodians and managers, allowing for a total picture of the portfolio.
- In this case, a family member wanted to see a full asset allocation based on personal assets, beneficial ownership in a GST Trust, direct ownership of an LLC, and indirect ownership of a second LLC through a Family Limited Partnership.
- Her Family Limited Partnership was managed by a different family member at a different custodian.
- Colony was able to provide a consolidated monthly statement, focusing her reports to all assets she owned across the various entities and custodians in one package.
- As a result of the broad and deep reporting, we are able to work with her accountant each year to estimate all investment income for the current tax year – allowing for year-end estimated income planning.
- Colony also provides certain tax reports to her accountant, including partnership and foundation reconciliation as well as compiling and organizing all 1099, K-1 and other applicable tax forms.