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You'd expect someone who glories in a name like Luis Carlos de Noronha Cabral da Camara to be wealthy. Luis Carlos was a Portuguese aristocrat who had an unusual estate plan - and a sense of humour to boot. According to Agence France-Presse, when Mr. da Camara passed away in 2001 he left his estate to 70 strangers that he selected out of a Lisbon phone directory 13 years prior to his death. Why not? He was a bachelor without children.

Let me ask: What type of legacy will you leave behind? And who will receive it?

Your Capital

When you pass away, you may have financial capital to leave to your heirs. But you also have other forms of capital as well. Dennis Jaffe, in his paper "Six Dimensions of Wealth," which was published in the Journal of Financial Planning in April, 2003, identified six types of capital: Financial capital, spiritual capital, human capital, family capital, structural capital, and societal capital.

Most people think only of their financial capital in their estate planning; I want to suggest that the other forms of capital need addressing too. I don't have space to talk about each of these today, but I do want to address one of them: structural capital.

Structural capital is simply the structuring that you leave behind to help your heirs manage the wealth, to make decisions, to get competent advice, to manage the family business or investments, and to steer your heirs in a volatile environment.

Clear as mud? Think of it this way. Your structural capital is the sum total of the structuring - the holding companies, trusts, etc. - that you leave behind, along with the ground rules, if any, that you ask your heirs to live by when it comes to investing and sharing the assets.

Structure Matters

Structure always matters because it will be a critical factor in determining the amount of tax you pay today, upon death, and that your heirs will pay after you're gone. For many, their structures will be simple: One spouse dies and leaves everything to the other spouse, which defers the tax until the surviving spouse dies. When the surviving spouse dies, everything is divided equally among the kids, the kids are left to their own devices to manage those assets, and you call it a day. No holding companies, no trusts, no complexity.

The truth is, however, the more wealth you have, the more significant your structural capital will inevitably be. The more wealth a family has, the more likely that wealth will not simply be divided equally among the kids and given to them when the matriarch and patriarch have passed away. It's much more common that the wealth is kept aggregated and managed by or for the benefit of the heirs.

And the more wealth you have, the more you want your structure to accomplish for you. Minimizing tax is always important, but it may also be important to share your core mission and values with the next generation; educate the next generation on how wealth is managed; foster entrepreneurship to keep the family's wealth growing; improve communications within the family; and establish philanthropic goals.

Sensible Structures

So, what type of structuring makes sense? Every family is different, of course. And the decision has to start with what's most important to you and what you want to happen when you're gone.

I have found that where you have enough wealth that may last beyond your children, it can make sense to leave your wealth to the kids in a holding company. The holding company could be owned by family trusts - one for each of your children. Your children would generally control their own trusts as trustee. Suppose you have three kids. The idea is that the holding company would be controlled, at any given time, collectively by a representative from each of the three "branches" of the family. There may also be a private or public foundation in the picture to which family members individually or collectively can donate.

This structure allows for a minimization of tax because dividends from the holding company can be sprinkled to various family members who are beneficiaries of the trusts, effectively sharing the tax burden. It also protects assets from creditors of the family.

Join us for a live tax chat Nov. 1

On Monday at 1 p.m. (ET), senior tax pro Cleo Hamel answers your year-end tax-planning questions. You can set an e-mail reminder for yourself in the box below. Mobile users can join the discussion by clicking here.

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