Impacts of Shared Assets on Family Governance - Doug Baumoel
Formal family governance is not beneficial for everyone. Some families are better off determining the allocation of resources on their own.
Others may seek professional help. Whether there is a disagreement among the family or confusion on the process, formal advising may be necessary.
Doug Baumoel, the founding partner of Continuity Family Business Consulting, assists families in the right direction when they face the confrontation and the challenges of owning and managing assets together.
Doug outlines a critical factor to consider when determining if a family is fit to be advised: the complexity of shared assets.
“Families with complex shared assets can benefit from a more organized decision-making process.
“This complexity not only refers to the level of wealth in the family, but also how their assets are structured.
“For example, assets become complex when there are several people listed as beneficiaries of the same trusts, or if illiquid real estate or business shares are involved. Imagine, for example, a shared trust where some beneficiaries rely on distributions to fund their lifestyle while others earn enough income to pay their expenses and want income reinvested for growth. For families with a high level of complexity, more structured meetings may be necessary for decision-making.”
