Peace of mind for Thanksgiving!

Anticipating anxious conversations around the table this turkey day?

If any of your loved ones express concern bordering on despair about the troubling things that are happening at home and around the world and wondering about what can be done about them as individuals and as a family, there is one practical solution that you offer that will both mitigate the risks and give you peace of mind.

Folk singer Joan Baez once famously said: Action is the antidote to despair. When you can, encourage your people to think about ‘I cans’ instead of ‘what-ifs.’”

Why do some families act and others don’t?

Over three plus decades of speaking with HNW families about their wide range of wealth and well-being concerns, I have often pondered what separated those who took action from those who deferred or worse, never moved forward.  

Let me first identify some of the traits of those who to take action:

  • They focus on what’s important but not yet urgent. They don’t kick the can down the road…they don’t wait for things to become urgent. They make a decision to do something.  
  • They believe it’s best to get ready for upcoming storms when the waters are calm, not turbulent.
  • They look at the world as it is…not as they wish it to be…and identify possible outcomes
  • Those with families tend to be more serious about evaluating risk.
  • Many have had an impactful event happen to themselves or within their family such as a health  or financial crisis. Several are descendants of immigrants who fled their home countries due to political strife…and some have family members who experienced the Holocaust.
  • They are proactive…many are impressively long-term planners.
  • They are all thoughtful, well informed, organized and decisive.

On the other side, we have observed that those who keep putting off backup planning do so because taking an actual step would be a recognition that the threats that triggered their outreach to me were in fact real, significant and immediate rather than ambiguous and distant.

Another barrier to action…in their view…is lack of awareness of viable, affordable options to avoid / escape these threats without compromising lifestyle.

Finally, I also observed that for some families their current “life inertia” was too great. They felt that their current threats were not sufficient or urgent enough to warrant triggering a backup plan…just yet. While for some this may have been the case, but just as one does not wait to smell smoke before buying fire insurance, prudence dictates that one should make a backup plan when one realizes that the threats are very possible in the future…and that if they do happen they could be devastating to one’s family well-being and wealth.

What issues are causing anxiety within your family?

reach for the peace of mind with a back up plan

Cleary the world is living in challenging times with increasingly more pervasive and serious risks. Couple this with the demonstrable reality that circumstances can change quickly…and those risks can become more significant and overwhelming in a matter of days or weeks.

Let’s consider a few current risks that could soon be considered clear and present threats. The list is long, but here are a few:

Risks around the world

  • War in Ukraine expanding to local NATO countries;
  • War between Israel and Hamas turning into a regional conflict; and
  • China saber-rattling over Taiwan and expansionism in the South China Sea.

Risks in the US

  • Severe weather events caused by climate change;
  • Dramatic increases in random acts of violence such as daily mass shooting events;
  • Increases in the number of overt acts of hatred against religious, racial and other minorities;
  • Increases in mental health problems…that are being blamed for much of the gun violence;
  • Restrictive laws targeting women’s health and privacy;
  • Book banning;
  • Voter suppression;
  • Congress’s inability to actually do anything that the majority of the US population firmly supports – gun safety, protection of women’s reproductive rights, equality of rights;

…and the list keeps growing!

How does one move from fear to action?

A back up plan can provide assurance

I often use the analogy of a “wildfire” to describe simmering political, social, economic and environmental situations that have the potential to erupt into infernos with little warning. Since our firm’s inception in 1990 we have worked closely with HNW individuals and families on every continent except Antarctica to design Backup Plans that will safeguard their well-being and that of their families in the event of potential wildfire events that could impact their lives. This has been accomplished by giving the family effective solutions tailored to the needs of each family member.

So what exactly is a Backup Plan…and how will one help address your family’s concerns and needs? If you are expecting me to answer 2nd residence and/or citizenship , you are only half right. Our view is that a second residence/citizenship that is not part of a well-designed Backup Plan is like the sound of one hand clapping. Put another way, as Shakespeare once said, “A second residence or citizenship does not a Backup Plan maketh!”. The other half of a Backup Plan is the integration with tax, family, and lifestyle issues. This requires working with other professionals and trusted advisors to design and execute the strategy. When residence / citizenship, tax and family law advisors are siloed, they not only overlook important issues, they often inadvertently cause significant harm on related issues. They need to work as a team.

A proper Backup Plan first identifies the financial, security and lifestyle objectives and concerns for you and every member of your family. It then sets out specific strategies to address them all in an integrated manner…often across multiple generations.

Strategies normally cover residence, citizenship, estate and succession planning, potential family law issues…and taxation.  A Backup Plan ensures that should any family members find their current situation threatened, they can avoid any negative impact. They will have the freedom to depart to a pre-planned location and financially sustain themselves comfortably in the future. In short the entire family will have to freedom to exercise options…or not…and have confidence in the outcomes.     

time for a back up plan
Time for a Back Up Plan

What are the first steps to getting a Backup Plan?

Here are some practical actions that you can discuss with your family:

  • Get professional assistance that covers ALL of the possible issues that need to be addressed. This will involve not only immigration and citizenship but also taxation, family law.…even security concerns.  This holistic view will not only help to ensure that all the necessary material changes have been addressed, but also to identify additional issues and options…and new opportunities. In a previous blog, I discussed this in greater detail;
  • Enlist the inputs of key business confidants – to ensure their support and business continuity;
  • Enlist the input and support of family members. Successful Backup Plans are not just approved at the boardroom table…they are also approved at the kitchen table;
  • Recognize that delaying a decision is making a decision…to do nothing.  Of course, we are not suggesting doing something just for the sake of doing something, but in these post-COVID days, lead times to execute a Backup Plan still remain long. Remember that you will need to get documents from one government to submit to a second government for a residence or citizenship. What took two months pre-COVID can now take six or more months…so delaying a decision can often be the riskiest, not the safest, option;
  • If a viable option is available, don’t wait for what you hope will be a better one. We have a client – a legitimate and highly successful businessman – who was justifiably reluctant to get important personal documents legalized in his home country for fear of drawing the attention of its autocratic government. When a viable solution was presented, he hesitated in the hope the risky situation would improve in his home country…or that the viable solution would continue indefinitely. Neither happened…and now his options and those of his family are very limited as the government is refusing to legalize his personal documents as they exert control over their citizens;  and finally
  • Plan for the worst…even though you continue to hope for the best.  To effectively do this, speak with your various advisors and get them to identify “the worst that could happen” in their particular area of expertise, and don’t be afraid to call them out if they are too general and vague. Now is the time to get granular…to fully identify and understand the risks and develop a mitigation plan to add to your master backup plan.
  • In selecting advisors we caution our clients to be very wary of second residences or citizenships sold by commissioned salespeople. Our firm has NEVER taken commissions from third parties such as countries/developers/ fund managers who are involved in providing residence or citizenship by investment programs. Therefore we avoid any question that our advice is conflicted and is driven more by the highest available commission than what is in our client’s best interests. A properly designed integrated Backup Plan which is developed and executed by non-conflicted expert advisors not only avoids unnecessary expense or avoidable problems…it gives our clients peace of mind.

So back to this Thanksgiving.  If, as expected, there are more conversations than usual tinged with concern, anxiety and despair, remember what Joan Baez said: “Action is the antidote to despair,” so think about the I cans…starting with a Backup Plan.

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