USE LEGACY PLANNING TO ALIGN VALUES ACROSS GENERATIONS Years before we met, Jack and Jill Jones had created an estate plan to protect their three young children should something happen to either of them. Since that time, their business and children had matured so their attorney, Sophia, suggested that the Joneses revisit their estate plan. Sophia asked me to meet with the couple before they began the document preparation process. With tax minimization in Sophia’s very competent hands, I asked the couple about their legacy, and if or how they wished to attach meaning to their financial wealth. “Are you asking about charitable giving?” Jack asked. “We each have left something to our favourite charities,” Jill added. “Yes and no,” I responded. “There are several issues many high-net-worth parents consider as we think about leaving the wealth we have accumulated. First, have we equipped our children to inherit wealth in a way that is consistent with all our efforts to create caring, confident and contributing adults? Second, do we want to use our wealth to continue to make a difference in our community or world? Third, will our lives have meaning? Jack said, “Talk more about that first issue of ‘equipping our children.’ I know I wouldn’t have known how to handle the amount of money our kids will inherit at their age. I do not know why we expect our kids to be better prepared.” Before I could answer, Jill jumped in, “I am concerned about inheritance being a good thing. We have seen inheritances ‘ruin’ too many kids and families. While we do not think that would happen with our children, is there something we could do to prevent it?” I suggested that Jack and Jill begin a process that connects their wealth to meaning—a process I call, “legacy planning.” Legacy Planning Legacy planning as I define it: • Is the intentional passing of wealth, values and life lessons from one generation to the next. • Prepares heirs to manage the responsibilities of wealth. • Is a tool parents use to model and teach behavior over
31 FAMILY OFFICE MAGAZINE
Mark A. Weber
SilverStone Group time. As you are more than your balance sheet, a legacy plan is more than an estate plan. Your legacy plan is an extension of your estate plan because it includes both values and financial assets, and grounds heirs in your values as you prepare them to manage a significant financial inheritance. Passing Values / Preparing Heirs In the initial stages of legacy planning, couples work together and with their advisors to establish a framework for their legacy. Elements of that framework include defining: 1) financial security for themselves, and 2) how much is enough, but not too much, for their children. Parents then articulate the connection between their values and how, ideally, they would like their children to use their inheritance. With that foundation, the transfer process can begin. Family Meetings A critical piece of legacy planning is communication, and arguably, the most effective form of communication is the family meeting. The explicit purpose of these meetings is to equip children to handle wealth, both practically and emotionally. In practice, however, periodic family meetings held over years bring family members together as they interact as a family unit.