Dynasty Wealth Structure: It’s Exactly What It Sounds Like! - YouTube

hi i'm jimmy sexton founder and ceo of esquire  group and today we're going to be talking about  

dynasty wealth structures so lately i've been  working with a new client with with a lot of new  

clients who are going through the well-structuring  process for the first time and it kind of made  

me aware of a trend that i thought would be  important to address in this video and that is the  

trend of taking a very short term view of wealth  structuring but before we get into the short-term  

view of wealth structure i want to give a little  summary of what wealth structuring is for those of  

you that don't know so well structuring is the art  of designing and implementing structures to hold  

and manage your worldwide wealth so you can grow  it protect it and pass it on to your heirs in a  

tax advantaged manner according to your wishes  now well structuring brings together several  

different areas of planning the  first of which is estate planning  

now estate planning is pretty self-explanatory  it's basically arranging your affairs so that your  

wealth gets passed on to your heirs in accordance  with your wishes the next thing it encompasses is  

succession planning and a lot of people confuse  succession planning and estate planning and use  

them interchangeably but they're actually very  different so while estate planning looks at who's  

going to receive your wealth succession planning  looks at who's going to control your wealth  

so who's going to manage your wealth once you're  unable to or you don't want to anymore the next  

thing that it encompasses is wealth protection  a wealth structure should be able to protect  

your assets from lawsuits creditors and even  divorces even in the absence of a prenup if it's  

if it's set up properly it also encompasses tax  planning so your wealth structure should give you  

significant tax benefits if it's done right and  finally it should provide you with some financial  

privacy in my view financial privacy  is a basic human right and everybody's  

entitled to it you know unlike what all these  transparency advocates claim everybody has a  

right to privacy it's nobody else's business  which you do with your with your wealth and  

privacy is actually a very key component of wealth  protection because they can't take what they can't  

find so now that we've gone over what wealth  structuring is let's talk about dynasty wealth  

structuring in this problem of a lot of people  having a very short-term view so a very typical  

sort of new client or or a current client that  wants to get into wealth structuring says to  

me is hey i want to put my wealth in a structure  that's going to protect it and give me access to  

it during my lifetime then i wanted to take care  of my spouse and that i wanted to go to my kids  

well that's great right i mean it's very  generous that your kids are going to get  

all this and i'm sure they're going to be stoked  when they get a bunch of wealth but you're also  

putting them in the same position that you were in  prior to doing the wealth structuring right so you  

owned all of your wealth and then you put it into  some sort of a wealth structure which is generally  

a trust or a foundation to provide you with estate  planning succession planning wealth protection  

tax planning and privacy well once you die and the  wealth then gets distributed out of this trust or  

foundation to your heirs they're the same boat you  were because they now personally own this wealth  

and now they need to do their own wealth  structuring right so they got to do their  

own estate planning their own succession planning  their own tax planning their own wealth protection  

their own privacy they have to go through  what you went through and invest the time  

and money to do it properly and this is why i  prefer dynasty wealth structures a dynasty wealth  

structure is essentially a wealth structure  that lasts a really long time for generations  

and the key component of a dynasty  wealth structure is that the assets stay  

in the wealth structure essentially forever so  the the because the assets never get transferred  

to your heirs you get a lot of benefits from  this so let me give you an example so assume  

for a second we set up a well structure for you  making yourself your spouse your kids and all  

your bloodline family descendants beneficiaries  now what that means is by making your bloodline  

family descendants beneficiaries is that anybody  descending from your bloodline is automatically  

going to be a beneficiary of the structure so that  means your kids are going to be beneficiaries of  

this structure their kids their kids and so  on for as long as the bloodline goes or as  

long as the structure is going to exist which  can like i said exist for many many generations  

and then let's all so that's taking care of the  estate planning aspect of it right so now let's  

say we also incorporated a very comprehensive  succession plan into this structure by doing so  

this succession plan is going to  outline the process and procedure  

for managers to be replaced and how the  succession of managers should take place  

so now we have a sustainable structure right  we have the beneficiaries outlined that are  

you know generations of your bloodline and we also  have how the management is going to work long term  

outlined through the succession planning that we  did so now what we what we have is we wind up with  

this wealth structure that owns all the wealth  and then you have your kids as beneficiaries

their kids but the wealth always stays in the  wealth structure so rather than the wealth  

structure distributing the assets directly to  the beneficiaries your heirs and then terminating  

the wealth stays inside of the wealth structure  and then makes distributions as needed  

or up to up to the board depending on how the  things set up to the beneficiaries right so  

assuming that this wealth structure is being  managed well and the income is in excess of

the original wealth that you put in it what will  happen is the assets will essentially always  

stay in the wealth structure and income  will be distributed to the beneficiaries  

and this happens for generations right  when your kids die for example then  

their kids are the beneficiaries and when they  have kids then they're the beneficiaries so  

you just keep having generations and generations  getting benefits but the assets are still in here  

and this comes with a ton of benefits  and i'm going to go over them right  

now so first of all estate planner right  you've taken care of the estate planning  

inside this structure for generations because  the wealth will always be owned by this wealth  

structure your the beneficiaries your heirs are  never going to have to worry about doing estate  

planning for the wealth that is in the structure  because you'll have taken care of that for them  

likewise succession planning because we  will have built a sustainable succession  

plan into the structure it's going to be clear  how the management is going to succeed from  

board to board from manager to manager and  so these heirs for all these generations are  

not necessarily going to have to worry about how  they're going to select new managers because we're  

already going to have laid that out how it happens  finally and this is a huge one you're gonna get  

wealth protection right now your heirs are gonna  because they don't own the wealth nobody can take  

it away from them right that means if they get  sued if they get divorced even without a prenup  

they're not no the people aren't going to  be able to get at the wealth because it's  

not technically their wealth now if the wealth  structure made let's say a distribution to them  

they might be able to get the hands on that  distribution because that distribution has  

become that person's wealth but the bulk of the  wealth is going to be self in the wealth structure  

that is immense right i mean think  about the very common conversation that  

children and wealthy families have to  have with potential spouses about prenups  

it's very uncomfortable right oh you know  trust me you know it's very unromantic  

but if the wealth is in the well  structure greatly reduces the need  

to have a prenup i mean in a lot of cases you  don't even need them because the person doesn't  

have anything everything is owned by the wealth  structure so this is a huge huge benefit right  

finally you're gonna have a tax plan they're  built in there right so probably if you had  

a good advisor uh the wealth structure  would have been set up in a jurisdiction  

that has this tax advantage and so a lot of  times you can set up a wealth structure in a  

tax-advantaged jurisdiction where the wealth  is allowed to grow within that structure  

relatively tax-free or at least at a very  much at a very reduced tax rate so that means  

because there's tax benefits on the income inside  the wealth structure the wealth is growing faster  

because it's not being diluted by taxes now this  also gives the heirs a lot of freedom in moving  

around right because if they personally own this  wealth what happens if they move to a country  

that has estate taxes or wealth taxes or high  income taxes right so one the wealth structure  

when it makes distributions to a beneficiary  the beneficiary is probably going to have to  

pay income tax on that distribution depending  on the jurisdiction that they live in  

but the wealth structure very  well could be distributing  

less income than those assets are generating  if if it's generating significant income and if  

the beneficiary owned those assets outright they  would be liable for income tax on all the income  

that those assets are generating rather than  just the portion they received which is likely  

the portion that they need additionally if they  owned those assets individually and they lived in  

a country that had a wealth tax on individuals  they would have to pay that wealth tax but if  

they don't own the wealth they wouldn't have to  pay that wealth tax additionally and this is one  

of the biggest threats to wealthy families is  estate taxes i mean in some countries estate  

taxes are like 50 that means every time that  wealth passes from generation to generation  

it's being reduced by 50 percent in taxes because  it's in the wealth structure it's not passing from  

generation to generation right it's always  staying in here and only the distributions  

are being distributed to the years which they're  paying taxes on but the wealth is still here  

it's not transferring to anybody generation  after generation the wealth is still owned by  

the wealth structure so there's significant  savings on estate taxes and finally privacy if  

this was set up right and you're a privacy-minded  individual then the structure would have been set  

up in a way to provide financial privacy  not only for yourself during your lifetime  

but also for your heirs and again that's  a very key component of asset protection  

that they can't take what they can't find so this  is fruits for these benefits that i really prefer  

dynasty wealth structures over these sort of short  term well structures that eventually distribute  

everything to the kids and a lot of clients say  to me well you know i don't really want to control  

the assets beyond the grave for generations and  generations and i can understand that right i  

mean you want your kids or or your other heirs  to be able to enjoy your wealth but putting  

it in a dynasty well structure doesn't have to  be about you exerting control over this wealth  

for generations and generations and generations  the reason for putting it in in a dynasty well  

structure are the ones that i've outlined is the  estate planning benefits the succession planning  

benefits the wealth protection benefits the tax  planning benefits and the privacy benefits and  

i think your heirs will greatly appreciate that  sort of let's say being unburdened by these things  

and so my recommendation is if you're considering  doing some well structuring take a very serious  

look at putting a multi-generational  dynasty wealth structure in place  

of course we at esquire group can help this is  what i do all day long check us out on the web  

at esquiregroup.com or shoot us an email at info  esquiregroup.com if you're interested in either  

setting up a wealth structure or potentially  restructuring a current wealth structure peace