Surprise Wealth Brings Unexpected Complications

Meet the Family: Cal Elliott* built a fortune investing in real estate and distressed debt and never told his family. He and his wife raised their five children in a typical middle-class suburb and never changed the family’s lifestyle as he achieved more and more financial success. It was only decades later, after Cal passed away, that the five children, now all adults with families of their own, learned of the considerable wealth – and hefty unpaid taxes and no estate plan- that their father had left them. With no warning or preparation, the siblings were thrust into the world of ultra-high-net-worth wealth management and advisors seemingly overnight. They felt overwhelmed and bewildered by their new status. The oldest son reluctantly became the group’s financial leader by default. Over several years the siblings tried various financial service providers but were generally disappointed.

Pitcairn’s Solution: Communication and education were the missing links. The Elliott siblings had a fragmented picture of their total holdings and limited financial literacy to understand the flood of information they were receiving from a cadre of advisors. We started by providing consolidated reporting that compiled data for over 200 distinct accounts owned by five different entities and managed by three different investment advisors. We soon added investment oversight and strategy guidance as well.

Next, we recommended financial education for all family members. The learning began at a planned family reunion where we first surveyed strengths and weaknesses and then played games to introduce wealth concepts.

In the absence of strong leadership, this family needed a quarterback. We began serving as a liaison among the family’s many advisors, including lawyers, accountants and investment managers. We also helped to implement a more defined governance structure to clarify responsibilities and reduce the risk of mismanagement.

The Family’s Response: The family benefited immediately from consolidated reporting that provided a more accurate accounting of their holdings and investment performance. Financial education and personalized coaching delivered by Pitcairn’s in-house experts boosted the siblings’ collective confidence and empowered them individually to move forward and make decisions regarding their portion of the inheritance. Perhaps most rewarding was the oldest son’s ability to finally relinquish the burden of the entire family’s wealth planning.

*The names have been changed.