Asset Protection

Crafting a Family Wealth Protection Plan

October 5, 2023
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8 min read

If you’re like many hard-working entrepreneurs or high-level professionals, you make so much money in large part because of your family. Nothing’s more critical than building up enough wealth to set your family up for success for generations to come. 

When your golden years finally arrive, you’ll be able to look back on your decades of effort and rest assured that your kids and grandkids will reap the fruits of your labor.

Unless, of course, something happens to drain the family wealth well dry. Truth be told, there are plenty of hazards that can affect your family’s wealth, both in the short term and in the decades to come (particularly after you are long gone). Today, let’s take a look at how you should go about crafting a family wealth protection plan.

What is a Family Wealth Protection Plan, Really?

A family wealth protection plan is exactly what it sounds like: a comprehensive, durable plan meant to preserve the wealth of your family for a long time to come.

Money has to be preserved, particularly if you want to spend it without using all of it up. For many high-net-worth individuals with $10 million or more to their names, this means savvy investments and regular distributions; that way, they can spend enough money each year to live comfortably without compromising their yearly income from dividends and other profits.

Things get more complicated when you think about your family’s wealth, though. Depending on the size of your family, the people dipping into your collective wealth could include you, your spouse, kids, grandkids, cousins, second uncles, aunts thrice removed, and much more. The bigger the clan, the more endangered your wealth is simply from overspending!

So a family wealth protection plan:

  • Determines how you can keep your family wealth solvent and, more importantly, large enough for your needs over a significant timeframe (think decades instead of just years)
  • Identifies the most likely hazards or threats to that wealth, then develops countermeasures against those hazards
  • Comes up with a plan for distributions or allowances so that everyone doesn’t dip into the pool too often or too much

Make no mistake, a family wealth protection plan is vitally important. If you don’t set up and implement one now, you’ll regret it sooner or later.

What Could You Possibly Need to Protect Your Family’s Wealth From?

Say you’re a successful doctor or business owner, and over the years, you’ve stashed away millions of dollars. With that fund set up, you are confident that your kids and grandkids will be able to go to whatever college they want and pursue their dreams without financial worry.

What could possibly affect your wealth, especially once it’s set up in a trust? In truth, there are plenty of hazards you should consider.

Misuse by Family Members

Naturally, it's more than possible for the family members you worked so hard for to misuse your wealth. After all, the people most likely to misuse wealth are those who didn't have to bleed or sweat to create it!

Say that you pass away, but you previously placed the majority of your estate and liquid capital into a trust for your descendants. Those descendants – rather than being responsible with the wealth you saved for them – decide to splurge at all on a few years of parties and travels around the globe.

Think this sort of scenario is unlikely? Think again. In truth, it’s much more common than you think, and plenty of wealthy individuals end up seeing their families whittle away the money they worked so hard to make over a few short years. There’s a reason why many people say that family wealth tends to decrease rather than increase with each successive generation!

If you don’t create a family wealth protection plan and dedicated trust vehicle for this eventuality, the money you saved for your family will be gone in no time.

Economic Challenges

Of course, you also can’t forget economic challenges. Say that you put millions of dollars into a trust. If those trust assets aren’t invested properly, or if you don’t account for inflation, the money you saved won’t be worth as much 20 years from now as it is right now.

In addition, economic instability can and does occur from time to time. If a recession hits in the US and all of your assets are based in the US economy, your family wealth will also suffer. The reverse is true if you are wise and diversify your portfolio or, in this case, the places where your assets are stashed.

Anticipating and protecting your family's wealth against economic challenges is another key concern for all high-net-worth individuals.

Lawsuits and Creditors

Lastly, and perhaps most importantly, your family wealth could become targeted by lawsuit plaintiffs and creditors.

The more money you have, the more people want to take it. If you’re a successful business owner, you’ve probably already been the subject of several lawsuits. What if one of those lawsuits were to be successful? It’s possible for your family wealth, like liquid capital or real estate, to be seized to pay for damages or other fees.

Similarly, creditors might come after the wealth of your family, especially after you pass away. If you are no longer around to defend your family’s wealth and estate, who’s to say what might happen if a few aggressive creditors come knocking on the door of your grandkids, demanding that they pay for your previous debts and bills?

Bottom line: you need to take steps now, while you are still capable of doing so, to protect your family wealth against lawsuits, creditors, and all other potential legal threat vectors.

Ways to Safeguard Your Family’s Wealth

Fortunately, there are several ways in which you can protect your family’s wealth both now and long after you’re gone. For the best results, your legal advisors will likely recommend that you leverage each of these options in conjunction with the others – the best defense is a multilayered defense, after all.

Estate Planning

Estate planning should be a no-brainer. If you have an estate worth guarding, you need to plan for:

  • Who will get what in the event of your passing
  • Who will manage the estate and distribute any assets
  • And so on

As a high-net-worth individual, one of your prime concerns is likely avoiding or minimizing estate taxes. The easiest way to do this is to place all the assets you plan for your inheritors to receive in a trust of some kind.

A trust eliminates the need for probate, thereby improving your family’s privacy and reducing estate tax requirements, because it assigns property and assets to people the same way probate would in other circumstances. 

Estate planning, though, doesn’t just involve putting assets in trusts; it involves writing a will, assigning an executor for that will, and otherwise getting your proverbial ducks in a row before you can’t.

If you don't know where to start, speaking to knowledgeable experts at Dominion is a good idea. We help many high-net-worth individuals set up estate plans that they can trust and that achieve their needs.

Keep in mind, too, that your overall goals for estate planning can shift throughout your life. Right now, you might just want to save money for any eventual kids. But when those kids are grown and you have grandkids, you might want to use your estate for other purposes, like college funds, charitable donations, and so on. 

Whatever you choose, having a plan in place will make achieving those goals much easier.

Life Insurance

Then there’s life insurance. You should always have at least one life insurance policy, which can further minimize estate taxes, plus help you avoid gift and income taxes when assets are transferred to heirs. On top of that, life insurance policies can transfer lump sums of cash to beneficiaries when you finally pass away.

Even without that, it’s simply a good idea to have a life insurance policy in place. It’s possible that many family members rely on you for income and resources. If you unexpectedly pass away, having a life insurance policy in place will help them get by.

Regardless, life insurance can help you protect your family wealth by:

  • Protecting against certain legal challenges
  • Minimizing how much your estate or family wealth is diminished through taxes or funeral expenses

Funerals can be quite expensive! If you don’t want your family wealth to be used up for your funeral and any associated fees, a life insurance policy can foot the bill for those costs, thereby keeping the majority or all of your estate intact for future inheritance.


Finally, there are trusts. You can and should use trusts regularly throughout your life, but especially for protecting the wealth of your family.

When you put assets in a trust, you give up ownership of those assets, thereby shielding your family wealth against creditors, lawsuit plaintiffs, and even messy divorces in some cases. 

For instance, if you lose a lawsuit because of an unfortunate legal defense, assets within a properly set up asset protection trust (the kind of trust we specialize in creating and maintaining at Dominion) won’t be subject to court claims. After all, you don’t own the assets anymore, so you can’t be forced to give them up!

Trusts are valuable for other purposes, as well, like:

  • Preventing family members from misspending distributions
  • Ensuring that your estate or collective wealth doesn’t diminish too quickly

Which Trusts Are Ideal for Shielding Your Family’s Wealth?

As a high-net-worth individual, there are a few different trust vehicles you should employ, including:

  • Estate planning trusts
  • Spendthrift trusts
  • Charitable trusts
  • Asset protection trusts

The last trust type is especially valuable. It will protect your assets from creditor claims, lawsuits, and other potential legal hazards by removing assets from your control. If the trust is set up in an offshore jurisdiction, like another country, US courts and creditors will be even less able to attack your estate or get their hands on your assets.

How to Craft a Family Wealth Protection Plan

The best way to craft a family wealth protection plan is to speak to Dominion right away.

Even if you think you understand all the moving pieces and parts included in a family wealth preservation plan, you probably don’t. Don’t take it personally; you’re an expert in your niche, and we’re experts in hours.

Family wealth preservation involves accounting for all the assets you want to save, taking stock of the potential threats or hazards that could get into that wealth, and so much more. There are many different strategies and tactics you can employ to protect the wealth of your family, as well.

Therefore, speaking to the experts is the wisest idea. They can help you:

  • Outline your overall goals and objectives while still crafting a plan that allows some flexibility for goal changes later down the road
  • Connect you to legal experts and other personnel or infrastructure so you can set up trusts or other legal instruments based on your needs
  • Research the right jurisdiction for an offshore asset protection trust, which can be highly important since it impacts whether your trust assets are truly secure
  • Provide you with peace of mind and sound legal counsel

Above all else, crafting a family wealth protection plan with the experts will ensure that said plan goes off without a hitch. With something as important as guaranteeing the wealth of your family long after you are gone, you shouldn’t leave anything up to chance.

Get in Touch with Dominion Today

When all is said and done, you need to rely on the experts to protect your family’s wealth in perpetuity. At Dominion, we have decades of experience shared between all of our members, and we’ve collectively helped to preserve hundreds of millions of dollars for our clients.

We’re the best in the business for good reason. Trust us with the wealth of your family and contact us today to learn more about how we can help you craft and implement a family wealth protection plan ASAP.

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