Wealth Protection

Preserving wealth through the generations today's strategies help to shape your future

"Your financial habits come primarily from your parents, and if you do not practice good decision-making from the top down, it can affect multiple generations,” said Karen L. DeRose, CFP®, CRPC®, president and managing partner of DeRose Financial Planning Group. “It really starts at the top, making sure that things are buttoned-down.”

DeRose Financial Planning Group, based in Chicago, provides multigenerational retirement, estate, and wealth planning services to clients who want to protect their hard-earned money and pass it down to the next generation. The firm takes a holistic approach to managing clients’ money and works with investors to plan for their parents and educate their children on the importance of wealth protection. DeRose Financial Planning Group – itself a multigenerational enterprise as DeRose’s sons, Anthony F. DeRose, JD, CPA, and Nicholas C. DeRose work alongside her – also encourages clients to tackle difficult discussions with family members early to prevent potential conflicts.


The firm also does not require a minimum net worth to sign on as a client.

“So long as you’re willing to invest in our planning fee then we will work with you,” Anthony DeRose said. “We didn’t want to turn people away for not having the right amount of assets.”

"Advisors Magazine” recently sat down with the three DeRoses to talk multi-generational wealth planning and the most common issues faced by families looking to protect their money.

“Often the family has built something really well from the ground up and the children are living off the fat of the land to a certain extent. That’s why it’s important for families to start talking as soon as possible,” Anthony DeRose said. “Families’ good financial health, from what we’ve seen, starts at the top – if their parents make good decisions and set the right path then they’re going to pass those good habits down to the next generation.”

Open dialog between family members does more than just ease possible conflicts. Handling tough conversations sooner rather than later also can lead to better planning, lower tax burdens, and a less stressful transition when a family member dies.

“When families collaborate with each other as a family and with their advisors, it’s better for everyone. There’s less financial stress on the family, often fewer taxes being paid, and more for the families to partake in,” Karen DeRose said. “I have also learned that when families collaborate together and their values are all aligned that there’s less infighting. Everyone, at the end of the day, knows what’s going to ultimately happen and who’s going to be stepping in when the time comes and the patriarch of the family needs some help. It’s just a much better outcome for everybody.”

‘Great Start Plan’ builds good habits
Bad financial habits can be learned at a young age and become increasingly difficult to kick as time goes on. DeRose Financial Planning Group works with clients’ children to begin building effective financial management habits as soon as possible, but it is a race against time as the DeRoses work to remedy years of educational system neglect.

“Unfortunately, there are no good basic personal finance classes in our education system, and so it is on the individual to learn good financial habits as they go,” Karen DeRose said.

“This is why we created a ‘Great Start Plan’ for our client’s children – this Great Start Plan provides the financial base they sorely need and gets them headed in the right direction, and with the right protections up front through company benefits or outside insurances which are important as you build wealth, have debt, and start a family.” The Great Start Plan also encourages saving as early as possible, she added.

derose400x500DeRose Financial Planning Group acts in a fiduciary manner for clients, meaning investors’ best interests come before firm commissions or other bottom-line concerns. That means education takes center stage in many client discussions as the firm seeks to empower rather than hand-hold. The lack of financial literacy preparation in schools, and even among seasoned professionals who are experts in their own fields, makes effective education vital as clients encounter a wide diversity of products, services, and options to choose from for everything from wealth accumulation to Long Term Care.

Client education also allows DeRose Financial Planning Group to hone in on client sore spots and ensure that sensitive topics are covered – with great care, but covered nonetheless. It also means that clients can be exposed to the non-monetary aspects of wealth planning, such as the risks involved in making financial decisions while emotional.

“There’s a lot that goes into retirement planning and it’s not all financial, some of it’s psychological,” Karen DeRose said. “Clients often don’t want to face needing Long Term Care … It’s very stressful. So, we do have the hard conversation about Long Term Care that nobody wants to face.”

derose quote550x400Delaying difficult conversations, or never having them to begin with, can lead to what Anthony DeRose described as “surprises” when a parent dies. Those sorts of surprises are never good and can end up causing serious conflicts within families if not preempted. Families need to maintain an “open dialog” during estate planning to avoid leaving children in the dark about their parents’ wishes, he said.

One way DeRose Financial Planning Group keeps clients on the same page is through its eWorth Client Portal online system, which provides a real-time snapshot of asset allocation, net worth, and assets versus liabilities. The system also provides a budgeting tool and allows credit cards to be integrated into the dashboard. Clients also receive a personal “vault” that securely keeps their documents, for example investment statements or tax returns. Karen DeRose said the system recently was upgraded and the firm has plans to continue making improvements to its functionality and security.

Anthony DeRose, who is 35, plans to assume control of the firm when his mother retires, and Karen DeRose has already begun working with clients to make sure there are no surprises during that transition. DeRose has not specified yet when she will retire, but wants her clients to be ready when that day comes, she said.

“Anthony is involved with all of my clients, and this is deliberate. I want my clients to be comfortable with my successor, which will provide a smooth transition when I retire,” DeRose said. “It also affords the opportunity for my client’s children to work with someone their age, and thus the good habits we have built up with my clients can transition down through the generations.”

Future foundations
DeRose Financial Planning Group encourages collaborative family decisions in regard to how accumulated wealth will be used. One tool that recently has become more popular is the donor-advised fund. Unlike traditional foundations, which cost money to run and can be cumbersome to manage, the donor-advised fund allows for faster, simpler decision-making, Anthony DeRose said.

“You can see multiple generations being able to make decisions as to where they’ll put their shareable dollars,” he said. “It’s a little bit easier to utilize.”
The donor-advised fund is more than just an easier-to-use tool, it also can improve family dynamics.

smallgroup500x750“A donor-advised fund (DAF) allows for many of the benefits a foundation affords (tax benefits, social good), but we have found that a DAF is easier to administer. It also allows multiple generations to make a joint decision for where they want to place their charitable contributions, and assists in making a familial bond for social good,” Karen DeRose said. “There are even advanced strategies today utilizing buildings or company stock, so there are great opportunities for succession planning as well with a donor-advised fund.”

Careful planning protects wealth
Today’s investor could be forgiven for putting asset accumulation over preservation. The financial media provides a daily drumbeat of sensational headlines, stock picks, and advice for growing wealth. All of that can sometimes be beneficial to investors, but risk often gets lost in the excitement of investing.

DeRose knows the importance of protecting wealth. She became a Certified Financial Planner after clients kept asking her to help them assess their company benefits, mitigate the risks associated with their investments, and better structure their estate planning. Keeping wealth safe means that it can be passed onto the next generation, meaning that clients’ hard-earned life savings and investments do not fade away when they pass. It takes careful planning to make sure that happens, however, and Karen DeRose warned that many clients think they have everything taken care of, only to surprise their heirs when the time comes.

One client thought her late husband had “handled everything” only to find out that he failed to prepare a will, meaning half of his assets went to her children without any consideration as to who received what.

“The older generation holds a lot of the keys to the kingdom here … And they often haven’t really done proper planning because they think that they have it all done,” Karen DeRose said. “Part of planning is also protecting wealth. There’s an emphasis today on investments, but it’s important that we look at the risks too.”

For more information on DeRose Financial Planning Group, visit: derosefpg.com

Associates of DeRose Financial Planning Group are registered Representatives of Lincoln Financial Advisors. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. DeRose Financial Planning Group is not an affiliate of Lincoln Financial Advisors. CRN-3361687-120820


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