How do you define Wealth in a family?
What does wealth mean to your family? That’s really quite a loaded question. There are endless possibilities, endless outcomes and endless ramifications. In his book Wealth in Families, Charles Collier encourages you and your family to ask yourselves that very question. Despite common approaches, wealth preservation actually has a lot more to do with evaluating your family than it does with evaluating tax and legal structures. As Collier puts it, “The focus of wealth preservation, it turns out, is not really financial.”Here are some key questions for you and your family to work through. The answers to these questions should be the compass for your family’s estate planning.
What kind of family do you want to be?
What are your family’s true assets?
What is really important to your family?
What should you do to guide and support the life journey of each family member over time?
How wealthy do you want your children to be?
What do you want to accomplish, or help others accomplish?
The key to all of this is that it can’t all be tackled with one family meeting—regardless of how well organized, cordial and thought-provoking that family meeting may be. This is a long-term and developing process. By “long-term” we mean that it should be a life-long process for you and every single one of your family members. Take a look at this list. Collier writes that in his experience, the most successful families include the following in their planning process:
They focus on the human, intellectual and social capital of their family.
They stress the priority of each family member’s individual pursuit of happiness.
They work on enhancing intra-family communication.
Their time frame for defining success is long term.
They tell and retell the family’s most important stories.
They create mentor-like relationships when establishing family trusts.
They have collaboratively defined a family vision statement (AKA the shared dream).
They teach children and grandchildren the competences and responsibilities that come with financial wealth.
They work at building strong relationships and getting to know each other.
They give younger family members as much responsibility as they can manage as soon as possible.
A successful family “knows who it is, what it stands for and where it is going.” You may not have all the answers yet regarding your family’s estate plan, but if you start with what’s important, then you’ll get it right every time.
