The SuccessCare Program
The SuccessCare Program


Mom and dad won't talk
If I were having a conversation with the next generation member, a question I would want to ask is this: What did you and your parents agree to when you took the job?

Getting started with family governance
Family governance is a process or structure to educate and facilitate communication between family members.

15 lessons family councils wish they knew before they started
Whether you are just starting a Family Council or have had one for years, much can be gained by considering the lessons others have learned in making their Family Councils work.


The third child


Written by Grant Robinson

In a recent meeting with a business owner and spouse to discuss their estate plan and how they wanted to treat their two children fairly and equitably, they suddenly brought a third child into the equation.

This third child was their term for their passion for creating something that would be a permanent part of their family -- something that would not only directly influence their son and daughter, but would also have a profound impact on generations to come.

Upon further questioning, it became clear that what they were trying to formulate was a way to bequeath a strong value system about wealth, either in their lifetime or through their respective wills. They were both aware of the story "shirtsleeves to shirtsleeves" and wanted to ensure that this 'affliction' didn't hit home.

Shirtsleeves to Shirtsleeves is an all-too common story about how a business is created by a hard-working, frugal individual whose attire is generally shirtsleeves instead of a business suit. The wealth that is created during his reign is passed along to his children who then enjoy a good lifestyle. From there, the wealth is inherited by the grandchildren who, not knowing any lifestyle outside of large amounts of money and the freedom to spend, promptly deplete that wealth entirely. At this point, the family members are back to their shirtsleeves and working hard to make a living!

The moral of the story lies in the fact that the wealth for the third generation has no purpose. It is disposable - and dispose of it they do! You may be familiar with Ghandi's Seven Blunders of the World. He recognized that wealth without work was indeed a mistake. If we don't understand the true power of wealth, it can destroy us.

The key to bequeathing wealth is to attach purpose to it. For example, building a family business has purpose, but how do you ensure that purpose is transitioned along with the shares? We need to learn not only to preserve the wealth we create, but also pass it along in a way that it can provide a purpose for multiple generations.

Spend Save Give

The Rockefeller family has had significant family wealth for several generations. There is a story about how they coach family members to use their wealth for a purpose. The concept involves three piggy banks, each for a specific purpose, in which family members are to deposit funds regularly.

The first piggy bank is to contain monies to be set aside for living expenses - money that each person will spend. The second bank is for the money that is to be set aside for personal stability and family support - that incorporates the money each person will save for the future. The third is for monies that each person will give - to enhance their values and their community.

This concept is still valid today. In planning your wealth transition, give some thought to how you can create purpose.

Where Can Wealth Play a Positive Role?

A focus on the Family circle in planning your transition is just as important as creating the Estate Plan in the Ownership circle, or making good business or investment decisions in the Management circle.

One of the objectives within the Family circle is to transition key values. This is a great opportunity to create that third child so that your wealth can play a positive role and have purpose. Philanthropy can be a very valuable tool in establishing this purpose.

Philanthropy

Philanthropy is about using wealth to create a lasting benefit. The focus is on preserving the capital but using the income from that capital to create and support specific programs that ultimately benefit others in the community or the family.

Philanthropy is focused on the long-term and is very different from charitable giving which is more a result of humanity wanting to have an immediate impact.

Charitable giving enables an existing cause to fund specific initiatives. We all appreciate the fact that we can collectively provide relief for Tsunami or hurricane victims or help to fund research into finding a cure for cancer. Charitable giving is very important but we have little or no say in how the funds are disbursed nor input into the policies of the organization.

A Hundred Years Later

A hundred years after the establishment of an education fund, the Harland family (not their real name) is discussing how it can establish a second philanthropic initiative. The education fund, which was originally established before the family came to North America, has been in existence for several generations now. The original benefactors are long gone, but their vision for the family has become an empowering legacy.

The income from the fund is now benefiting the current generation. There are branches of the Harland family tree that don't have personal wealth but, because of the generosity and foresight of her predecessors, one cousin was recently able to enrol in higher education and fulfill a dream that would not otherwise have been possible. She plans to one day create a legacy of her own.

In adopting a philanthropic approach, you will establish a fund that can create income for a specific purpose. You will not only have more input into how the fund is operated but also how the resulting income is deployed. You might choose to establish a fund that will benefit your whole community or one that will benefit a specific group of people.

Take a moment to talk to your trusted advisor about the options available in creating purpose for your wealth to pass along the right values to your children and grandchildren. No matter the focus of your initiative, it will have a significant impact on your family. Some will choose to be involved in the governance of the initiative, but all will learn the value of using wealth for a purpose. Philanthropy can be the foundation of your legacy.




  
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