Tag: wealth management

Nov 26th

Wealth Education: Fall Back Into Financial Discipline and Secure Your Family’s Future

As the fall season and the upcoming new year usher in a sense of fresh beginnings, they provide an ideal opportunity to revisit an essential aspect of family wealth: preparing younger generations to manage and preserve it responsibly. Just as students gain knowledge for their futures, educating heirs about financial discipline and responsibility equips them to handle the complexities of wealth. This season is a perfect time to embrace a mindset of renewal and growth in family wealth education, establishing a legacy that will benefit future generations.

Wealth education is a crucial element of estate planning, empowering heirs to understand and build upon the foundation their families have established. Here are five strategies to create a culture of financial responsibility and stewardship within your family, and how Whittier Trust’s family office services can play an influential role in your journey.

1. Start Early

Integrating financial education at an early age is paramount to personal development. Foundational skills like budgeting, saving, and investing can be tailored to fit each stage of development, ensuring that wealth management becomes second nature. These early lessons should progress from simple financial activities, such as managing allowances or setting savings goals, to more complex discussions and experiences that develop a lifelong understanding of prudent wealth stewardship. Fostering these responsible habits will set your children up for success, supporting their futures in many ways.

2. Create a Family Legacy

 True wealth education extends beyond numbers; it instills a deep-rooted understanding of hard work, family values, responsibility, and philanthropy. Children should be taught that wealth extends beyond financial capital—it represents the power to create, impact, and foster societal change. Family discussions centered around shared goals, charitable initiatives, and community contributions not only reinforce these values but also inspire a sense of purpose that transcends material wealth. 

3. Involve Advisors

Navigating the multifaceted nature of wealth management requires expertise, and a family office can play a vital role in supporting families through this journey. Engaging trusted advisors provides heirs with guidance that goes beyond family conversations, introducing them to the nuances of wealth management from a professional standpoint. At Whittier Trust, our team of advisors works alongside families to guide them in creating structured wealth education, ensuring heirs receive advice that reinforces family values and clarifies their financial responsibilities.

4. Foster Open Communication

Effective wealth stewardship is built on a foundation of open communication. Transparent discussions about the complexities of managing significant assets help develop a clear understanding of roles and responsibilities within the family structure. By encouraging questions and facilitating conversations about wealth, families create an environment where heirs feel empowered to participate actively and responsibly in managing the family estate. Such dialogue mitigates potential future conflicts and reinforces a unified family approach to wealth.

5. Embrace Continuous Learning

Financial education should be an ongoing process, with each generation adapting to new financial landscapes and personal milestones. Incorporating continuous learning into family life—through discussions, advisor-facilitated workshops, or shared learning activities—ensures that heirs remain well-prepared to manage their assets as circumstances evolve. This commitment to lifelong learning fosters resilience and a proactive mindset, hallmarks of responsible and adaptive wealth management.

As you look to the future, consider how investing in wealth education can fortify your family’s legacy. By instilling these principles, families create a framework for future generations to navigate their financial responsibilities with acumen and respect for the values that define their family. By embracing these strategies, supported by Whittier Trust’s comprehensive expertise, families can establish a tradition of disciplined wealth stewardship that secures their prosperity and purpose for years to come.

To learn more about wealth education and the stewardship a multi-family office can offer future generations, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

 

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Nov 18th

Weathering the Storm: Preparing for the Unexpected in Wealth Management

In a world where sudden shifts are inevitable, natural disasters such as the recently devastating Hurricanes Helene and Milton are powerful reminders of life’s unpredictability. Such events highlight the importance of robust financial preparation for ultra-high-net-worth individuals (UHNWIs), especially on the West Coast—an area prone to natural risks. While personal disaster preparedness is key, UHNWIs should also focus on “storm-proofing” their estates and real asset portfolios. Just as it's necessary to reinforce a home to withstand a hurricane, safeguarding wealth from the unexpected requires a strategic approach. Proactive wealth planning can act as a financial safety net, helping to ensure financial resilience against both environmental and economic storms and unforeseen complications.

What Are The Challenges For An Estate?

Earthquakes, wildfires, and other natural disasters can create challenges for property, businesses, and financial portfolios. In 2020 alone, OEHHA reported that California experienced a record high of 4.2 million acres burned, which was more than 4% of the state's land. As of October 22, 2024, Cal Matters has recorded 1,708 structures that have already been destroyed by wildfires this year. The California Department of Conservation also estimates that the state's annual earthquake loss is around $3.7 billion. 

UHNWIs are advised to consider not only that real assets could be in danger but a broad spectrum of risks—including family challenges, market volatility, and even potential economic disruptions—that could impact their financial well-being. By aligning wealth management strategies with these regional threats, UHNWIs can create more resilient financial plans.

Staying Ahead of Risk: You May Not Be Thinking About It, But a Good Advisor Is

Ultra-high-net-worth families and individuals already have much to consider, and while they’re deeply invested in managing their estates, they may not fully grasp the range of challenges that could impact their assets. In other words, people often don’t know what they don’t know to look for. Fortunately, multi-family offices and experienced advisors do, and it’s proven to be a sound practice to trust long-term preparation and proactivity to the professionals. 

As an example and an area of focus often impacted by “Acts of God,” Whittier Trust helps clients stay on top of essentials like insurance, ensuring that their coverage matches the current value of their properties, collections, and other real assets and is comprehensive enough to mitigate for any number of events. Proper coverage for homes, collectibles, and other valuables is essential in regions prone to earthquakes and wildfires, where the cost of damage can quickly escalate. Additionally, business owners may need specific policies to protect against disruptions from natural events, ensuring continuity and stability despite environmental challenges. The peace of mind that comes with knowing your family office has thought through every detail—both expected and unexpected—means clients can focus on their passions, families, and future without worry. It’s about being able to enjoy the present, knowing the future is secure.

For ultra-high-net-worth families, a trusted family office does more than manage finances—it handles the day-to-day, so clients can focus on what truly matters, while also preparing for the unexpected. A family office like Whittier Trust is dedicated to looking out for every aspect of a client’s wealth, anticipating needs they may not even be aware of, from tailored insurance coverage to proactive asset protection.

Protecting Real Estate Assets

Real estate can be an impactful asset, but it comes with its own set of risks—especially in regions prone to natural disasters. For the same reasons that Whittier Trust portfolio managers diversify to mitigate the effects of market instability and disaster-related threats on investments, Whittier Trust understands these challenges and takes a “storm-proofing” approach to managing real estate portfolios. This means not only diversifying locations but also selecting properties and investment strategies that can weather market and environmental changes. What sets Whittier apart is their in-house real estate team, which actively manages assets with an eye toward both protection and growth—a unique benefit few family offices offer.

Communication and Education: Ensuring the Family Is Prepared

Preparing for the unexpected isn’t just about securing assets; it’s also about ensuring that family members are prepared. Whittier Trust holds firm to the belief that open communication and education are essential. Our team understands the unique dynamics of family relationships and helps navigate these to promote cohesion and clarity, particularly in times of change or uncertainty. By working closely with families to keep them informed on the protections and strategies in place—from insurance to estate plans—we ensure that each member understands their role and responsibilities in case of an emergency.

Empowering the next generation with financial stewardship education is also a crucial piece of preparation that multi-family offices and wealth management advisors employ to ensure younger members of the family are ready to take on future challenges and responsibilities. Family meetings led by Whittier Trust advisors not only keep everyone informed and engaged but also foster a culture of resilience across generations, making it easier to adapt and respond effectively to the unexpected.

Estate Planning: The Silver Bullet of Preparedness

Estate planning is one of the most valuable tools for preserving family wealth against all manner of challenges. Whittier Trust focuses on creating estate plans that account not only for life’s expected transitions but also for impactful natural events and sudden changes within the family or Family Business. A comprehensive estate plan includes everything from trusts and charitable foundations to provisions for asset distribution and protection in unexpected circumstances. Our goal is to ensure that, no matter what happens, your family’s vision is safeguarded, and your legacy is protected for generations to come.

By working with a multi-family office to prepare for both expected and unexpected events, UHNWIs can build resilience and confidence, allowing them to weather not only financial storms but also life’s inevitable shifts with stability and foresight.

To learn more about how an experienced multi-family office can help protect your assets, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Nov 14th

Assessing the Need for a Family Office or Transitioning an Existing One

For individuals and families of significant wealth, managing a substantial portfolio of assets and investments demands a sophisticated and comprehensive approach. From financial planning and asset management to legal and tax strategy, risk mitigation, and multi-generational legacy preservation, there are myriad intricate factors to navigate. This growing complexity has led many affluent individuals and families to establish private family offices—exclusive firms dedicated entirely to addressing the distinct challenges of significant wealth.

Family offices can take various structural forms. Sometimes, these offices evolve organically within a family-owned business over time to meet specific family needs. In other instances, they are established through a family-controlled holding company, often following a significant liquidity event or wealth transfer. Alternatively, they may be operated by a professional multi-family office firm, such as Whittier Trust, servicing the needs of multiple wealthy families collectively.

Regardless of their particular structure, family offices function as the private wealth management and advisory teams for ultra-high-net-worth individuals and families. Their primary goal is to centralize the comprehensive management and stewardship of substantial family assets. These offices offer a range of services, including investment management, estate planning, philanthropic guidance, tax planning, accounting/bookkeeping, real estate administration, and family business oversight. However, most tend to specialize in a few core areas based on the family's specific situation.

The evolution and particular needs of a family office can vary greatly depending on factors like whether the family operates an active business, their generational status, any significant past liquidity events, and the extent of their philanthropic goals. For families led by first-generation wealth creators, the office may concentrate operationally on accounting, bookkeeping, taxes, and growing the founder's assets. Transparency and outside advisory involvement can be more limited.

Families undergoing a liquidity event, such as selling a business or transferring to subsequent generations, often require more comprehensive services. This includes support with multi-generational wealth transition, estate and tax planning, family governance, and philanthropic engagement. Embracing change and collaborating with specialist advisors during this phase is key.

For families with an office spanning multiple generations after a full wealth transition, the focus may shift to maximizing core competencies like investments or charitable activities. These well-established offices rely heavily on robust governing protocols and targeted outside expertise. However, given the private nature of family offices, it can be difficult for them to find opportunities to share ideas and gain outside insight.

Defining family offices presents a challenge, as the industry's interpretation varies widely based on perspectives and context. As the saying goes, "If you've met one family office, you've met one family office." Each is uniquely tailored to individual client needs, current stage, and philosophies regarding legacy and wealth management. Understanding these nuances is crucial for affluent families assessing whether to establish a centralized family office or transition an existing one.

Families can face significant challenges when it comes to structuring a new family office, modifying an existing office, or winding down operations due to the retirement of key employees or shifts in priorities. The cost of setting up or maintaining a single-family office can start at $1.5 million annually and increase substantially from there. Additionally, the ability of a single-family office to adapt to rapidly changing landscapes in areas like cybersecurity, compliance, and technology efficiencies can be costly or difficult to implement effectively.

Partnering with a multi-family office like Whittier Trust can allow families to still look and feel independent while gaining enhanced benefits from leveraging an institutional-caliber platform. These firms provide families with seamless access to sophisticated resources, dedicated expertise across all wealth disciplines, and a permanent governance framework able to evolve with the family's needs over generations—all often with a significant decrease in overall operating cost.

Knowing when and where to partner with a firm that can provide scale, deep resources, and specialized implementation capabilities is vital for affluent families navigating critical family office decisions. By consulting seasoned multi-family office professionals well-versed in the entire lifecycle, families can gain invaluable guidance tailored specifically to their circumstances and long-term goals.

Written by Whit Bachelor, Senior Vice President, Client Advisor at Whittier Trust. Whit is based out of the Newport Beach Office .

Featured in the Las Vegas Review Journal. For more information about how Family Office services can bennefit your family, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Nov 5th

Don’t Let ‘Em Buy the Ferrari

Exploring trustee discretionary distributions:

Trustees are often given discretion over the circumstances under which a distribution may be made from a trust to a beneficiary. This article explores some of the factors that are important to consider when giving your successor trustee this power. 

There are many reasons people place money in trust for their heirs. Trusts provide professional management of assets for beneficiaries who either do not want to spend their time on such matters or perhaps do not possess the required skills. Trusts may also provide a level of asset protection from the beneficiary’s creditors. Finally, trusts often protect the beneficiary from their own impulses to spend recklessly. By naming a successor trustee to control distributions from a trust, the protective nature of a trust is more easily preserved.

Most people who place money in trust for heirs want the funds to be available for certain things and not available for others. Frequent reasons for distributions include paying health and education expenses, starting a business, or buying a home. The common joke is that Mom and Dad want their children to be able to buy a car—just not a Ferrari! The challenge is that a successor trustee, particularly a corporate trustee (such as a bank or trust company) is not going to know the beneficiary as well as a family member and may have a harder time weighing the decision to distribute or withhold funds.

Disbursements for health and educational expenses are quite common and straightforward. Absent contrary language in the trust agreement, health expenses would include doctor bills, pharmacy invoices, and health insurance premiums. Educational expenses would typically include tuition, materials, room and board, and even travel expenses. Medical and education expenses that may be considered “alternative” may also be covered unless the trust agreement contains restrictions.

What about funds to start or buy a business? If the grantors are entrepreneurs themselves, they may want to make money available to their heirs for such purposes. In such cases, a good trustee will want the beneficiary to present more than just an idea. At Whittier Trust, we ask the beneficiary to have a business plan and financial projections. An important consideration will be how quickly the business will get to break-even status. It’s best to avoid a situation where the trust will be asked to support future distributions without limitation, or“throwing good money after bad.” While the nature of start-ups is always uncertain, it is good for the beneficiary to be aware of the limitations of the trust.

A similar business plan analysis should be undertaken when the beneficiary wants to buy an existing business or invest capital in a friend’s business. Most corporate trustees will be leery of the latter and often can play the role of “bad cop,” allowing the beneficiary to keep the friendship intact. In such cases, we are happy to let the friend know that the proposed investment is not aligned with the trust’s overall investment philosophy. This has saved more than one beneficiary from making an investment in a pal’s bar or movie.

Many parents and grandparents want the trust funds to be available for the purchase of a home for the beneficiary. In such cases, we will weigh the choices between buying the home in the trust or making a distribution directly to the beneficiary for that purpose. If the house stays in the trust, the trust is often responsible for things such as property taxes, insurance, and capital improvements. The house, as an asset of the trust, remains safe from potential creditors of the beneficiary.

If the funds are given to the beneficiary for the purpose of buying the home, it is important to consider the beneficiary’s ability to support the normal carrying costs of real estate. Will the trust need to make further distributions for insurance and property taxes, or does the beneficiary have resources outside of the trust to handle these? If the home is in a community property state, is there a risk of inadvertently converting the real estate from separate property to community property?

What about the Ferrari? We have yet to meet a grantor who is in favor of the Ferrari-type purchase. After all, if the desire is to let the beneficiary do whatever they want with the money, there is not much need for a trust.

What is the best way for a grantor to convey their wishes to the successor trustee? Trustees are duty-bound to follow the specific terms of the trust agreement, so it’s possible to include very specific distribution provisions. However, given the ever-changing nature of life and the longevity of many trusts, handcuffing a trustee is not optimal. We often recommend that the trust language be broad enough to accommodate unforeseen circumstances, giving future trustees plenty of latitude. The trust agreement can be supplemented by a “letter of wishes” in which the grantors spell out their desires for the use of the funds. While these letters are not legally binding, trustees will look to them for guidance. Most trustees find these very helpful when making distribution decisions.

When looking for professional trustees, it is important to ask them about their practices and procedures when it comes to entertaining a beneficiary’s request for distributions. Some corporate trustees are relatively inflexible and only review requests monthly by committee. At Whittier Trust, we look at requests on a case-by-case basis as they are made since time is of the essence in certain situations. Also, ask if the main objective of the trustee is strict preservation of the trust for future generations or if they are willing to accept a letter of wishes or trust language that favors the current beneficiary. Any good trustee will welcome these conversations in advance of being named in the trust.

For the grantor who is afraid of a recalcitrant trustee, including language allowing the beneficiary or another family member the ability to remove the current trustee and replace them with another trustee may provide additional comfort.

Like with all estate planning, professional advice from a capable attorney is the best place to start. Your lawyer will have had experience with different trustees and will be able to provide a perspective on what they have seen.

Written by Tom Frank, Executive Vice President and Northern California Regional Manager at Whittier Trust. Tom is based out of the San Francisco Office and oversees the investment team for multiple Whittier Trust offices.

Featured in Mountain Home Magazine. For more information, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Oct 25th

Identifying the Key Traits of Market Disruptors

Typically, in portfolio asset allocation, the concept of diversification is deemed beneficial to avoid stock-specific risk.  There have been many academic studies supporting this concept.  Although diversification makes sense from a “risk-return” perspective, to have robust performance and beat benchmarks consistently, investors should find stocks that they are willing to hold in a sufficient portfolio weight that will consistently outperform benchmarks.  With the S&P 500 averaging 8-10% annual returns, finding stocks that provide upside over the index is not an easy task.

Nevertheless, the one way we have found to accomplish this objective is to take positions in stocks that are disruptors - disrupting their industries or even creating new ones and fulfilling customer needs better than the competition.  This means companies that are innovating in such a unique way over the longer term that the competition just cannot keep up.  These companies rapidly gain market share from incumbents or even establish new end markets where there is little competition.   

The modern-day example of such disruption is Nvidia. Most know the semiconductor industry was dominated by Intel for the majority of the late 20th century and into the 21st.  Intel focused on central processing units (CPUs) that were the “brains” of personal computers, notebooks and servers.  Intel relied upon Moore’s law, created by former Intel CEO Gordon Moore, which involved the doubling of computing power every two years. This worked well as the personal computer (PC) proliferated in global society and, later, as internet usage grew.  Intel dominated its end markets and had few viable rivals.

But as Moore’s law reached its peak, Nvidia has taken the crown of the world’s largest semiconductor company by making its graphics unit processors (GPUs) more functional to manage the demands of artificial intelligence (AI).  Nvidia’s semiconductors can work together in an array to create massive computing power and exceed the limits under Moore’s law.  In addition, Nvidia management has indicated a doubling of computing power essentially annually with each generation of AI-based GPUs.  

Such innovation has led to massive revenue growth with FYQ12025 (April) sales growth of over 262% and adjusted earnings per share growth of over 573%.  Nvidia has been a clear disruptor in the semiconductor industry and remains at the forefront of AI innovation likely for many years in the future. 

This is akin to Apple Inc.’s performance under former CEO Steve Jobs.  On June 29th, 2007, Apple introduced the iPhone which clearly took the smartphone concept to a new level.  Apple sales growth and stock price appreciation have been phenomenal from that date forward with an annualized revenue run rate just for iPhones of almost $200 billion (as of June 30, 2024) and the stock up 6000% (60x return) since the introduction.

So, what are some common denominators to successfully invest in disruptive companies?

We focus on the following:

  • A Visionary CEO 
  • High Growth or Nascent Industry That Will Be Very Large
  • Company’s Approach to Industry is Disruptive to Incumbents
  • Advantage(s) Will Last for Long-Term – Creating a Moat
  • Growing Free Cash Flow & Improving ROIC

1. Strong CEO Who is A Visionary

A visionary CEO is one of the most important things to look for when investing in the stock of any company, no matter the sector.  There have been many instances where a visionary CEO was replaced by one who was not so prescient or insightful.  These instances have typically led to the failure of the stock. We can point to many examples, with one of the most recent being Disney.  CEO Bob Iger led Disney from March 2005 and retired at the end of 2021.  Disney’s board chose Bob Chapek as Iger’s successor.  The company went from a well-run entertainment conglomerate to one that had lost its competitive advantages in many end markets.  Disney stock declined about 40% in less than a year under Chapek. Luckily, Iger returned in November 2022 with Chapek’s inauspicious dismissal.

2. High Growth Industry

A strong company in a weak industry is usually a poor investment.  Rather, the “secret sauce” is to own a “strong company in a strong industry”.  This typically indicates a market share gainer with a large total addressable market (TAM).  Nike’s rise to become the premier athletic shoe supplier was based on taking market share in an industry with an exceptionally large TAM. The same has been true for other disruptors like Nvidia, Meta, Eli Lilly and other stock success stories.

3. Disruption of Incumbents

On the introduction of the iPhone in June 2007, cellphone market leaders included Nokia, Motorola, Samsung, and LG.  As discussed above, the iPhone was a giant leap forward in terms of both communication and computing.  Apple’s growth under both CEO Steve Jobs and Tim Cook has been astounding, allowing Apple stock to surpass $3 Trillion in market capitalization.  The first iPhone disrupted the cellphone market and created the world’s largest company by market capitalization.  An investment of $100,000 at the introduction would be worth almost $5,800,000 today!  There are many other examples of such industry disruption from Netflix for consumer entertainment to Chipotle for burritos.

4. Advantage(s) Will Last for Long-Term – A Moat

Any investment that does not offer a long-term advantage is arguably a trade.  Trades are attractive to many investors but will not typically provide outsized gains, especially after short-term capital gains taxes are paid.  Companies that are disrupting need a large “moat” to make sure their competitive advantages remain intact over the long term to generate outsized stock returns.  This can be through patents and licensing (although enforcement internationally has been difficult), a superior customer interface or proprietary software (such as iOS for Apple or Cuda for Nvidia), or other means.  Nvidia’s annual product cycles which entail massive improvements in performance and efficiency for AI systems (as seen with the transition from the Hopper generation of GPUs to Blackwell late in 2024 and with Rubin planned in 2025) are the latest method demonstrated to maintain a long-term technological lead over competitors.

5. Growing free cash flow & Improving ROIC

Ultimately, companies that are disrupting their industries should show extraordinary improvement in their financial metrics i.e. they need to generate outsized returns for investors.  Some metrics to judge success are growth in free cash flows and return on invested capital (ROIC).  These metrics allow an investor to monitor company progress in an impartial fashion.  Improvement in both metrics over time should result from a successful industry disruption. Improvements in net margin also should be tracked.

Conclusion

Companies that are disrupting their industries have the possibility of adding outsized equity performance in a diversified equity portfolio.  There are many historical examples including Apple, Starbucks, Nvidia, Nike, Netflix and others whose CEOs and/or founders out-innovated and tactically outperformed peers to either create massive new markets or garner massive shifts in existing market share.  Undoubtedly, there will be new examples in the future.  Finding such companies early in their growth cycles is a key to future investment success.

To learn more about Whittier Trust's market insights, investment services and portfolio philosophies, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Oct 15th

Real Estate Wealth Management

The right investment and estate strategy can help create a legacy of real estate holdings that will benefit your family for generations.

In 1891 just before the turn of the century, a young man from Maine named Max Whittier rode a train cross-country to California to seek his fortune. Nearly a decade later, after several failed attempts to find oil, he risked his life savings of $13,000 on land along the Kern River in the southern Sierra Nevada mountains northeast of Bakersfield. By 1903, the area was the top-producing oil field in the nation. Whittier kept the land rather than selling it for a quick profit, and today Kern River remains one of the largest oil fields in the continental U.S. 

Out of the wealth Max Whittier created as a pioneer in real estate, oil, and gas, Whittier Trust was established in 1935 to manage the family’s assets for his four children. In 1989, the company expanded to serve other families, ultimately creating a platform that comprises five core pillars of wealth management:

“These five pillars give us great latitude to tailor investment strategies to individual client goals as part of our multifamily office services,” says Andrew Paulson, who manages a $2B real estate portfolio of diverse asset classes across the U.S. as Vice President of Real Estate at the Whittier Trust Pasadena office. “Many wealth management firms specialize and don’t provide real estate services. But at Whittier, active investment and management of real estate has been part of our platform for over 100 years.”

The Rewards of Real Estate

Real Estate is a unique investment class that performs differently from stocks, bonds, or other investment vehicles. Here are some of the primary reasons why Whittier Trust encourages clients to invest in real estate:

  • Investors have much greater control over property ownership than owning a small sliver of a company through shares of stocks.
  • Although real estate is considered illiquid, real estate values are much less volatile than share prices.
  • Real estate is a good hedge against inflation as rents and values typically increase with inflation.
  • Real estate requires local knowledge. Understanding what is happening on Main Street is as important as what is happening on Wall Street.

“A major differentiator for Whittier Trust is that if a client comes to us with an extensive real estate portfolio our team can hold those real estate assets as a fiduciary, or we can serve as an investment advisor over those assets,” explains Paulson. “In addition, for trusts with real estate assets, we have the ability to serve as trustee, which is a rare advantage among asset management firms.” 

“At the same time, our real estate group actively sources new investments that clients can add to their overall real estate allocation,” Paulson continues. “Our firm portfolio consists of Multifamily, Industrial/Commercial, Office, Retail and Flex Space properties, and we have a broad list of qualified sponsors who are sourcing deals across the country. Throughout the history of the firm client demand has remained very strong for these direct real estate investments and all recent opportunities have been oversubscribed. We are currently focused on sourcing more acquisition opportunities for multifamily and industrial assets to continue to broaden our list of experienced partners and sponsors.”

Estate Planning to Preserve Your Real Estate Portfolio

We’re all taxed on our possessions when we die, and there are only two ways to reduce that tax. You can have fewer possessions, or you can decrease the value of those possessions. Real estate owners are uniquely situated to do both, and Whittier advisors have unique expertise in this area, from initial planning to settling the estate. 

Reducing what you own is the first step. Under current law, an individual can give away $11.5 million of assets without incurring gift (or estate) tax. A married couple can give away twice that amount, or $23 million. So if a real estate owner had a property worth $11.5 million, he or she could give the entire property away within the amount of his or her exemption. That exemption amount is scheduled to be cut in half in 2026.

That brings us to the second step: reducing the value of what you own. Whittier Trust helps real estate owners use another advantage related to estate planning—owning assets inside of entities. We help owners make gifts of their interests in entities while taking valuation discounts for lack of control and lack of marketability (which appraisers typically discount in the range of 30 to 40%). For example, a real estate owner holding a building in an LLC, structured with a typical 1% managing member interest and a 99% non-managing member interest, can gift their 99% non-managing member interest with a 30% discount. 

When a real estate investor passes away, even though estate taxes can often be paid over a 14-year period, the cash flow needed to make those tax payments can greatly reduce the cash available to provide for the family. Or worse, for investors with significant portfolios, such assets may need to be sold to pay estate taxes, and the owner's efforts in putting together a real estate portfolio can be lost—often a lifetime accumulation of irreplaceable assets. With proper estate planning, however, those assets can be maintained to provide support for future generations.

The Nevada Advantage for Multigenerational Wealth

If properly planned, real estate assets can pass not only from the real estate owner to his or her children, but also on to his or her grandchildren by taking advantage of the generation-skipping transfer tax exemption. Whittier Trust helps real estate investors use strategies of gifts or sales to trusts for family members to allow the real estate assets of those trusts to be properly administered for beneficiaries in the future.

“In California, most trusts have termination clauses that restrict a family’s sharing of legacy assets,” Paulson says. “Under state law, trusts have a maximum duration of 90 years (or no more than 21 years after the death of an individual alive at the time the trust was created). Whittier Trust Company of Nevada was specifically created to help California families protect their wealth with the Nevada advantage. Residency is not required to transfer those assets to Nevada-domiciled trusts which under Nevada law permits a trust to remain in effect for 365 years.”

In keeping with Max Whittier’s vision for the land he invested in more than a century ago, Whittier Trust believes real estate is an important component in building lasting family wealth. For clients wanting to pass a portfolio of properties down to children and grandchildren, these long-term trust strategies are just a few of the ways that we help you share that wealth with successive generations. 

To learn more about how the right estate planning strategies and real estate portfolio management can help benefit your family for generations, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Oct 8th

DAFs vs. Private Foundations

Is there a “best” way to give?

“When I speak with a client about charitable giving, the most common question is whether they should create a private foundation or use a donor-advised fund,” says Ashley Fontanetta, Senior Vice President, Client Advisor at Whittier Trust. “Unfortunately, there’s no quick and easy answer except this: It depends on your priorities.” 

A simple conversation with the Whittier Trust Philanthropic Services Team can help a client get to the heart of those priorities. Our advisors might begin, for example, by asking who will be involved in your charitable giving and in what capacity. They’ll need to know what types of assets are being used to fund the entity and in what amount. And they’ll want to discuss how much importance you place on control.

The answers to these and related questions will typically point to which charitable structure is the best fit for a client. But first, let’s make sure everyone understands the essential differences between DAFs and private foundations.

Private Foundations 

“Private foundations are often the go-to choice because they are the best-known option,” says Fontanetta.“But that doesn’t necessarily make them the right choice for you.” Charitable foundations are governed by legal rules that are too restrictive or cumbersome for some clients. The key rule is that a private, non-operating foundation has the legal obligation to distribute no less than 5% of its average asset value to qualified charities each year. So, to give a simplified example, if your family created a private foundation that averaged total assets of $10 million, you would be obligated to distribute $500,000 per year for charitable purposes.

Private foundations can be created as a corporation or a charitable trust. They are often governed by a board of Directors or Trustees and can either be set up to last in perpetuity, or to sunset and shut down after a certain period of time. “One of the unique advantages of private foundations is that they can pay for expenses related to their charitable purpose,” Fontanetta adds. “For example, family members might travel to visit a grantee for a site visit or attend a conference to learn about an issue area. The foundation can even pay stipends or salaries for people who serve as board members or staff. In contrast, donor-advised funds cannot be used for any such expenses.”

Donor Advised Funds

A donor-advised fund, or DAF (pronounced as a word, daf, not the initials D-A-F) is like a checking account for charitable giving, Fontanetta explains. “Once a donor places money into the DAF, they receive an immediate charitable deduction for the contribution. After that, the donor can advise (request) charitable distributions to be made to any 501(c)(3) public charity in good standing.” 

Much like a checking account is held at a banking institution, DAFs are held at a sponsoring organization, such as a community foundation, financial institution, or large nonprofit. A key difference, however, is that as soon as funds are placed into a DAF, the sponsoring organization owns those assets. The sponsor might have certain rules about how they operate their DAFs, but generally, they allow for the donor and any other individuals named by the donor to advise as to where charitable distributions should be made. This is an important distinction: Since the money in the DAF technically no longer belongs to the donor, they are not directing grants, simply advising as to who the charitable recipients should be. Sponsoring organizations differ in the ways they handle investments, succession, and acceptance of certain assets, so it’s very important to interview sponsoring organizations before deciding where to open your DAF. 

Best Fit

Returning to the original question—private foundation or DAF—we hope you might now be seeing some distinctions that might make the answer more readily apparent for you. 

“The best piece of advice I can give is don’t go it alone,” says Fontanetta. “There are multiple resources and forums for philanthropy to help guide your journey, whether you’re considering a private foundation or a donor-advised fund. Of course, the credentialed professionals on our team at Whittier Trust are always at your service.”

Over the last four decades, Whittier Trust has advised several generations of affluent families on their philanthropic choices. Philanthropy is a key component in the overall financial management and estate planning services Whittier provides and can also be a cornerstone of your family’s personal relationships and legacy.

For more information on charitable giving vehicles or to learn more about Whittier Trust's Philanthropic Services, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Oct 2nd

The Hard Work of Inheritance

Preparing for the Personal Process of Estate Settlement

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. That’s where a multi-family office comes in—they are there to help individuals cope with the tangibles and intangibles, before, during, and after significant life events.

Preparing for death and facing its aftermath presents two of life’s most uniquely challenging moments—where complex legal requirements collide with intensely personal decisions and responses. As a multi-family office manages the legal and organizational intricacies of estate settlement, they are uniquely equipped to guide families through the six steps of this highly personal process with compassion and thoughtful consideration for family dynamics. 

Step 1: Consulting with Legal and Financial Experts

This first step can be both the simplest and the hardest: contacting an attorney and CPA. It may only require one short phone call, but even that can seem impossible when an individual is in shock or despair. A multi-family office can act as the trustee, executor, advisor, or simply an administrative team, but no matter which role they assume, they can help an individual take that first step—and they’ll do it with complete professionalism and empathy. 

 Step 2: Locating Critical Paperwork

If an individual or family has a prior relationship with a multi-family office, they’ll most likely have their will, trust, and other legal documents on file. If not, the multi-family office team will begin the process of locating and verifying those files as well as identifying trustees, beneficiaries, and heirs while the individual or family tends to more personal matters. A multi-family office will 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 will be secured, inventoried, and properly distributed. 

Step 3: Managing Everyday Business 

In this stage, a multi-family office tends to do everyday business that an individual or family is too busy to handle. They’ll 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. Nothing is too small. A multi-family office understands what an overwhelming checklist an individual or family faces when there’s a funeral to plan and relatives to contact, on top of the everyday complexity of affluent households. 

Recently, Whittier Trust had a client who asked just one thing: to get their mother’s car title transferred to the Department of Motor Vehicles. Everyone knows that there’s no such thing as a simple transaction with the DMV, but for a client advisor, making those phone calls and filling out all that paperwork with the necessary documentation and signatures—is rewarding as they know they helped someone when it was needed most.

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

An individual 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 when an individual has a trust in place before death, there are courts involved, and it’s 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 take this immense burden of time off of an individual and follow every detail through to completion with a loving heart. An individual or family doesn’t have to put their lives on hold trying to figure out whether Form 709 comes before or after probate notifications, because a multi-family office will be handling it with an experienced and comprehensive team including an attorney and accountant for as long as it takes to finalize the estate. 

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 an individual inherited their father’s mint-condition 1958 Corvette, but they have no space or use for it. Maybe their sister is upset that they were 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 an individual and the whole family can move securely into this new phase of their life.

For more information about Estate Planning, Trust Services or what a multi-family office can do for you, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Sep 24th

Whittier Trust Elevates Dean Byrne to Executive Vice President

Whittier Trust, the oldest multi-family office headquartered on the West Coast, is pleased to announce that Dean Byrne, CFA®, has been promoted to Executive Vice President, while continuing to serve as Senior Portfolio Manager and Regional Manager of the Whittier Trust Company of Nevada, Inc. In his role, Dean is responsible for leading a team of experienced professionals in delivering customized wealth management services to high-net-worth clients while advancing initiatives to further Whittier Trust’s growth strategy.

Dean Byrne has been with Whittier Trust for more than 20 years, playing an integral role in advising clients on holistic asset allocation, risk assessment, efficient wealth transfer strategies and charitable giving, always emphasizing after-tax performance. As part of Whittier Trust’s Investment Committee, Dean contributes to shaping the firm’s investment strategies and client solutions.

"Dean’s advancement to Executive Vice President acknowledges his exemplary leadership in Nevada and his steadfast focus on delivering personalized, high-caliber service to our clients," said David Dahl, President and CEO of Whittier Trust. "Under his strategic guidance, our Nevada office has seen significant growth and a deepening in the quality of the services we provide to our clients. Nevada, with its unique trust and estate planning capabilities, is a key part of our strategic vision, and we are eager for Dean to continue driving our future efforts there."

Dean Byrne’s extensive background includes his designation as a Chartered Financial Analyst (CFA®) and his involvement with the CFA Society of Nevada. He is deeply connected to the University of Nevada, Reno (UNR), where he received his bachelor’s degree in Finance. Dean serves on the Board of the University of Nevada Foundation and is a member of their Investment Committee. He is also an active member of the University’s Silver and Blue Society and sits on the Advisory Board for the school’s College of Business.

In addition to his professional achievements, Dean contributes to the community as the Treasurer and a member of the Board of Directors of Classical Tahoe, a premier cultural event in the region.

Dean’s promotion is a testament to his expertise, leadership, and unwavering dedication to Whittier Trust’s mission of providing personalized, comprehensive, and local wealth management services. 

 

For more information about Whittier Trust's wealth management, estate planning and family office services, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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Sep 17th

Whittier Trust Elevates Brittany Renna to Vice President

Whittier Trust, the oldest multi-family office headquartered on the West Coast, is pleased to announce the promotion of Brittany Renna, CFP®, APMA®, CTFA®, to the role of Vice President, Client Advisor, with the firm’s Newport Beach office.

In her new role, Brittany will deliver a holistic and customized approach to managing clients' wealth and estates, helping them navigate complex financial landscapes and plan for the future. Brittany is known for her deep commitment to working with business owners on pre-liquidity and succession planning strategies. By collaborating closely with estate planning attorneys, tax advisors, and portfolio managers, she creates tailored solutions that address her clients’ specific needs and ensures smooth wealth transitions across generations.

“With the growth we’ve been seeing in the time since Brittany has joined Whittier Trust, we anticipate that she will play a pivotal role in the company’s Newport Beach office, contributing significantly to not only this office but the company’s continued success,” said Lauren Peterson, Senior Vice President, Client Advisor at Whittier Trust. “Her expertise and passion for helping clients with intricate financial strategies make her an invaluable asset to our team. I’m so proud to work alongside Brittany and am excited to see the remarkable things she’ll achieve in this new role.”

In addition to her role at Whittier Trust, Brittany serves on the board of Impact Giving, a women’s collective giving nonprofit based in Orange County. Brittany holds a Bachelor of Arts degree in Economics with an emphasis in Accounting from the University of California, Los Angeles, and a Master of Science in Personal Financial Planning from the College for Financial Planning. Brittany is also a Certified Trust and Fiduciary Advisor (CTFA), Certified Financial Planner (CFP), and Accredited Portfolio Management Advisor (APMA).

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For more information about Whittier Trust's wealth management, estate planning and family office services, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

 

From Investments to Family Office to Trustee Services and more, we are your single-source solution.

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