Preparing Heirs

“From shirtsleeves to shirtsleeves in three generations.”  - Andrew Carnegie (1835-1919)Plenty has changed in the past century since Carnegie spoke those words. Here’s one thing that hasn’t: When it comes to preparing heirs, failure requires no plan, but success always does.The place where a lot of families can go wrong in preparing the next generation is in thinking that “financing” your children is the best way to prepare them. As parents, we all want to contribute to our children’s dreams and passions so that they can lead happy lives. But financing your children is different than equipping them. Just because they have money doesn’t mean they have the know-how about how to use it wisely. Having that knowledge can mean the difference between the failure and survival of your wealth.It takes intense consideration and planning to ensure the continuation of your wealth. At the same time, you could have the champion of all estate plans but if your children don’t take stock in it, then the plan is useless. This is why you also need to “plan” your plan. How are you going to implement your plan, and more importantly, how are your children going to implement your plan?A family mission statement should guide the wealth transfer process to ensure the values and vision that helped to build your family’s wealth are also transferred to the next generation. One of the best ways to approach this is to get your children involved in the planning process early on. Helping your children to build trust with your advisory team is key. Once you’re gone, your advisory team and your children will be the ones implementing the plan—so you want to make sure the channels of communication between them are open.As we discussed in an earlier blog post, it takes intense reflection to arrive at your place of most potential—the place where your wealth can go the furthest. You need to prepare your heirs so that they can also see your place of most potential and can steward your wealth forward.Failure truly does not need a plan. But success does, especially when you’re planning out generations.