Some wealthy individuals forget to plan for the future or put systems in place to ensure their legacy and family’s well-being continue after they are gone. As a result, their wealth often disappears with them. This may explain why some donate part of their fortune to charity or support philanthropic causes.
During the recent launch of the private wealth by Old Mutual, a new investment solution for high-net-worth individuals and entities in Uganda, one of the key concerns was how fast an individual’s wealth, assets or money from their bank accounts quickly diminishes amongst relatives shortly after their demise.
Zac Kisesi, the managing director of the Old Mutual Investment Group, argues that the private wealth investment solution comes when many wealthy investors have outgrown the traditional unit trusts and are seeking more advanced, diversified, and globally integrated investment opportunities.
“Most families have lost a wealthy person and how the story ends is known. People you love the most are those who waste the investments you leave behind. We have also seen this in the unit trust where clients pass on, and the first thing their children do is take out all the money, which may not have been the intention of the deceased. Perhaps it was to continue bearing returns for future generations. Instead of leaving the wealth to chance, have the discussions early. This is not estate planning but legacy planning,” Kisesi explains.
Kisesi says the private wealth investment solution is a customised product for individuals aimed at understanding your risk profile and return objectives. While some investors want to diversify assets outside the country, others want to diversify locally because of different spending needs and expectations of returns.
Ruth Sebatindira, the founder and partner at Ligomarc Advocates, says instead of directly bequeathing wealth to children, the wealthy individuals are increasingly using strategies like upfront gifting and establishing trusts to manage how wealth is transferred to their children. While the end goal is the same, that is, passing on assets to the next generation, the approach reflects a more cautious and long-term mindset.
Instead of handing over large sums of money directly, many parents place assets in trusts. These trusts name the children as beneficiaries, but the assets are managed by trustees who follow specific rules set by the parents. This allows the parents to retain control over how and when the money is accessed, especially when the children are still young adults who may not yet demonstrate financial responsibility.
This approach lets wealth grow and be protected over time, while giving the children space to mature. It is not about withholding wealth but playing the long game of ensuring that the next generation is prepared to handle significant financial responsibility when the time is right.
Trusts
Trusts, Sebatindira, says, come with specific milestones, particularly related to age, to guide how and when beneficiaries can access the assets. For example, a wealthy individual in Europe might set up a trust stating that their child can access $1 million at age 25.
This kind of structure allows parents to delay full access to wealth until they believe the child is likely to be more mature and capable of managing it responsibly. The trust can also be designed with additional stages, such as partial distributions at different ages (for example, 25, 30, and 35) or tied to other milestones like completing higher education or starting a business.
By using age-based milestones, trusts serve both to protect the assets and to encourage personal development and financial responsibility over time.
“The same thing can happen in our (Uganda) case. You just want to manage how the young beneficiaries access your assets over the long haul,” Sebatindira says.
The case of philanthropy
Philanthropy, Sebatindira emphasises, is important because wealthy individuals or families are part of the community who don’t make the money or accumulate the wealth alone. They sometimes have purposes and causes to contribute to, making it a holistic approach that they donate to beneficiaries, communities and other causes and give less to their children.
“It is not that it is a trend that wealthy people are giving to philanthropy and leaving out their children. Philanthropy goes in the news, and the trust instruments remain private,” Sebatindira explains.
From a legal perspective, philanthropic trends are coming up because wealthy individuals are thinking deeply about life beyond or after themselves. To whom much is given, much is expected.
Wealth transfer is about more than just money. It is about legacy, vision, and responsibility. People who have created significant wealth often begin to think deeply about what impact their wealth should have after they are gone. Instead of letting wealth disappear with them, they choose to create a legacy that benefits not just their immediate household but also future generations and the broader community.
“You have been around, made a lot of money and have contributed to society. Should the wealth die with you because you have passed on? No. Some are envisioning a legacy to do things that will live beyond themselves. Some bring children on board and share their vision with them, and children who buy into the vision carry it forward. They will build their vision,” Sebatindira explains.
Therefore, involving children in this vision by helping them understand the purpose behind the wealth can lead to continuity, where the children not only preserve the legacy but also build upon it with their values and goals.
“It is developmental that you don’t think of yourself and your household, but also family harmony, community development,” Sebatindira notes.
For divorcing or separating couples, they must have a plan to give property directly to their children to avoid creating unnecessary tension and fights, some of which can lead to death.
“Lack of a plan is the most chaotic thing you can do to your loved ones. Write a Will, a trust, or a holding company. Some people have small estates that they may never have to do a trust, and their interest is no complication when they are deceased. If you have blended families, complex businesses, and huge empires, you will need trusts,” Sebatindira advises.
Failure to sort out family governance through a family office and constitution not only disturbs you in the long run but also impedes a lasting legacy you all desire to have.
