Family Legacy Planning

Shirtsleeves to Shirtsleeves, Clogs to Clogs, Rice Paddy to Rice Paddy.  No matter the language or culture, each has a proverb that stands for the proposition that the first generation builds the wealth, the second generation spends it and the third generation is back to trying to build it again.

In the US, the modern day statistics tell the story:

• Only one in five children of the affluent will themselves be wealthy when they retire.
• Inherited wealth, gone in 18 months!
• 90% of families fail to keep unity and assets together into the third generation.

If less than 3% of successful families fail due to an inadequate estate plan or poor investments what is it that makes families fail?  What do “successful” families do differently?

The Family Legacy Plan.
The first thing a family should do is to determine together what they want their legacy to be. A legacy is more than money -- it's what the family does with the money and how the family conducts itself. Legacy planning involves family harmony and health as well as integrity and reputation.

Keeping the legacy alive over the generations depends on how family members contribute and interact. Often broader legacies -- the Vanderbilts, for example -- are built by a subset of family members who are energetic, insightful leaders, usually with a strong entrepreneurial spirit. Truly successful families will build those leaders from generation to generation, imparting to each the importance of the multi-generational legacy strategy. 

Whether your philosophy is that of Warren Buffet who's children are obligated to work in careers approved of by their father to support themselves or of John Adams who said: “I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.” or somewhere between, we can help.

If you are interested in learning more about creating a plan that sustainsyour family legacy, you are invited to call us to learn about the personalized service provided by the Bandera Law Firm.

RECCOMENDED READING:  BOOK OF THE DAY

Family legacy and leadership are important subjects that have a great influence on the future of the family as a whole and a profound impact on the lives of its individual members. Although each family has its own history and unique destiny, this book will bring to all families a deeper understanding of their legacies and a practical approach to their leadership. As a result, leaders, members, and advisors alike will be able to manage comfortably both the continuity and change that families require.

An appreciation of family legacy, as set out in these pages, begins with an understanding that legacy is as much about the future as the past, and that true family wealth is about far more than money. Equally, family leadership is often more about leading from within the heart of the family rather than from the head of the table. It is also about achieving the consensus and commitment necessary for family members and their leadership teams to master the risks, and capture the opportunities, they face together.

Rich with insights and new ideas, and full of practical examples, this book can help readers to preserve true family wealth in challenging times, and enhance the abilities of a family at any time to turn a financial fortune into an enduring family legacy.

FURTHER READING AND RESOURCES

The 25 Best Practices of Multi-Generational Families
This paper by several principals of Genspring Family Offices summarizes the best practices that they learned through research and working with more than 700 of the country's wealthiest families.

The Family Mission Statement
This short article by Janet Bandera gets you started on pulling together your Family Mission Statement.

7 Habits of Highly Effective Families
This book by Steven Covey tells you that 90% of families are "off the track" most of the time, but by knowing where the track is (having a plan) and using the family compass they can get back on track.
 
Inheriting Wisdom
Inheriting Wisdom was founded in 2004 as a specialty consulting firm that designs Legacy Plans for families, and provides training on legacy issues for their wealth advisors. Drs. Carolyn Friend and James Weiner, clinical psychologists, designed and created Inheriting Wisdom: The Legacy Process that Reaches Across Generations. This innovative, self-discovery process equips affluent families with the practical tools to identify their values, traditions, and guiding principles. The purpose of the process is to provide families and their wealth advisors an intentional strategy for passing on more than just assets to the next generation. Legacy Planning promises families the chance to affect the course of family history by passing along their wisdom while distributing their assets.