Most people desperately wish to leave more than just their money behind when they pass. And the more successful people are in life, the stronger this feeling becomes. They want to leave a legacy. They want to have inspired their children and grandchildren to do great things in life, and a way to continue to inspire them after they are gone. They want family traditions, Christmases and Thanksgivings to be what they have always been—spent together, and full of stories, love and laughter. They want things to be as they are today or perhaps even better.
The problem is that for most families this simply doesn’t happen. Success creates money and money can be the root of all evil. Money can do awful things to families. Usually the ones that say, that would never happen to my family, are the very ones it happens to. You may have the most wonderful children in the world. They all get along. They are all successful. But what if one of them falls on hard times when you pass, perhaps mounting medical bills? What if his wife is pushing him to do things he wouldn’t normally do? It happens. And so can a lot of other things that change the way a person has always thought about money.
A while back, an article came across my desk from a magazine called The Progressive Farmer. The title was Avoid Family Business Sins. 1. Not everyone has a family business, but everyone should have a family-centric estate plan, which attempts to avoid these same sins.
- Avoiding Crucial Issues—This is usually the elephant in the room. No one wants to talk about it and everyone avoids it like the plague. The problem is that avoiding these issues may cause your family members to make plans of their own. And often these plans won’t align with yours.
- Focusing on Equality over Fairness—This goes against every grain in a parent’s body. They have always treated their children equally. Fair can’t always equal. This is especially true when a family business, farm or ranch is involved. The main thing is that you communicate why to EVERYONE.
- Surprising Family Members—Whether you like surprises or not, you shouldn’t surprise your family with ANYTHING. Be open and give them time to ask the questions they need to ask to be okay with what you are doing.
- Keeping Silent—Silence can destroy relationships. Yours, your spouse’s, and your children’s.
- Refusing to Relinquish Control—Although you can easily see where this applies to a family business, very few think about how it can apply to their legacy. A common fear for a patriarch or matriarch is that their children will not be good stewards of their money. They simply cross their fingers and pray during their final breath that all will work out. Well, what about doing a test run now? You can always put strings on your plan, but this way you will know.
Frank Mullins, founder of Legacy Wealth Counselors, created an assessment we use during our Legacy Planning Process. He ends this assessment with a single question that is crucial, “If my financial wealth transferred today, I am confident that my family is prepared for the responsibilities and opportunities that will accompany it. Yes/No”
Most people want their success to be celebrated, shared, and carried on for many generations to come. The sad truth, however, is in the old saying—shirtsleeves to shirtsleeves in three generations. Don’t let this happen to your success. Our Legacy Planning Process helps families create a multi-generational vision that not only focuses on your legacy, but on the family’s legacy, which is built upon the foundation you set today.
- Woodbury, Lance. The Progressive Farmer. July 2016. Avoid Family Business Sins.