Inherited wealth can be a blessing or a curse. Can empower families to enjoy freedom and comfort during their lives and enable them to make a positive contribution to the community. Or it can lead to overindulgence, sloth and lead to infighting within the family.
Without a solid plan, a family can sit by and watch their investments disappear in the process handing down wealth to younger generations. Worst of all, when it happens, the family often fragments and relationships are destroyed.
Unfortunately, the axiom “shirtsleeves to shirtsleeves in three generations” really was the case for an infinite number of wealthy families. A great deal of this failure may be related to traditional estate planning that only recognises financial assets at the expense of ignoring the intellectual wealth and human wealth.
Intellectual wealth consists of knowledge, education and life experiences of family members. Human wealth is the people and their life satisfaction.
To preserve and develop the financial wealth, families must focus their attention on the promotion of human and intellectual wealth. A family that takes account of these sources of wealth is much better prepared to grow their wealth for future generations.
A narrow wealth financial, while only deserving of a place, often ignores the entire image of wealth, which can lead to problems. Keeping the family heritage, formally called legacy, planning is a process that consists of these basic steps:
Conduct a family retreat
Host a refuge in a secluded and relaxing area, to ensure that you will be free from distractions. The purpose of this meeting is to ensure a high quality, deep thought and soul searching session devoted to determine the heart and soul of the creators of wealth and their family.
This meeting typically lasts one day and covers various topics in order for producers of wealth in order to attain the objective of determine not only their values and goals, but also create the family’s statement, mission statement, financial statement, philosophy and a letter of intent.
These meetings are facilitated by a carefully qualified family heritage consultant and sometimes a family consultant trained in legacy planning who attends as well. The result of this encounter is a rough draft of a plan written legacy designed exactly according to the wishes of the creators of wealth in a way that is aligned with the vision, philosophy and mission statement financial.
Hold a follow-up meeting
This step is potentially a bit more challenging as heirs will participate in this meeting and all kinds of problems can potentially arise. This meeting takes a little more preparation.
A pre-meeting telephone interview of each heir is often found useful and is led by a facilitator or trained member of team, family psychologist. This step may lead some potentially serious problems between the heirs or the parents, but also professionally is facilitated in a way which is intended to strengthen the unity and the closure which is very useful for the whole family.
This event will mark the beginning of family governance. All the relatives, the legacy scheduler coach and family consultant trained should participate. Should introduce the idea of family governance, examine the various forms of wealth and discuss the culture that you want to create for your family.
Documents created at the family retreat should be open for discussion. The idea is to get the whole family on board the plane that you created, take possession of the process and begin to take on their role in the Government’s focus on what’s important.
Implement the necessary planning
This is the step to take care of necessary entities such as trusts, charitable foundations dynasty households and other entities or trusts that legally support the philosophy, vision and mission of your family. These entities must be created with a long-term perspective that promote human and intellectual richness of the family, and then work to protect and grow assets for many generations.
Build the family Leadership and Governance
Family governance needs to be strengthened through regular meetings of families. Leadership roles in the family should be established at the first meeting. Over time, the family reunion must make decisions to sustain a STA.