Family Wealth Preservation: Building a Lasting Legacy
While most people believe that estate planning is important, only about 31% of the U.S. population has a will in place. Preparing for the distribution of wealth should be a priority for families with considerable assets. Prudent planning is essential if you want your wealth to make a difference in the world after your death.
Developing a Sense of Purpose
High-asset families take several approaches when dealing with the distribution of an estate. While some wills and trusts spread wealth within the family circle, other directives seek to use accumulated wealth to help others. Such instructions may include establishing charities, supporting educational institutions, or funding grants.
However you wish to distribute your wealth, it is helpful to share your intentions with your family members while you are still alive. Letting your family know your vision includes them in the decision-making process. Sharing your purpose in the present will also prevent confusion and hurt feelings in the future.
Organizing Around a Mission
One of the challenges of generational wealth preservation is the difficulty of predicting change. What seems like a pressing concern at the moment may disappear in a generation. For example, the educational institution you want your estate to support might dissolve or merge.
A family mission statement is a tool that will guide your loved ones after your death. With this framework in place, successive generations can carry on your legacy. This statement should be flexible, allowing future descendants to adapt to the unexpected.
Including your current family members in the mission statement development process gives them a sense of ownership. Your personal vision becomes a shared purpose that they can support.
Establishing Clear Communication
Discussions of estate distribution can create strong emotions. People are often uncomfortable talking about mortality. Even though preparing your estate is a practical concern, family members may be reticent to talk about the possibility of your death.
However, it is better to have this conversation before you are gone so that your family can discuss your wishes and understand them. Your family members will also bring new ideas and questions to the table, allowing you to look at your plans more critically.
If you retain a law firm to assist with your endeavors, an open discussion allows your family to get to know the estate planning lawyer and ask questions about legal procedures. Any information that your family can have ahead of time will streamline the transition after you are gone.
Clarifying Rights and Responsibilities
Although they may not readily admit it, one of the concerns in the background of family members in estate planning discussions is how it will affect them as individuals. They will have questions about their share of the estate and their obligation to the family trust or foundation.
Family conversations about your mission and purpose will help address these concerns. You can spell out how they will benefit from your estate as well as your hopes for the future.
It is always best to acknowledge the enthusiasm of your family members when forming a charitable trust, organization, or foundation. If you have relatives who are passionate about your cause, you might make allowances to provide them with resources and educational opportunities, preparing them for a leadership role. Less motivated family members might simply be asked to vote on significant decisions.
Providing Impartial Guidance
Family dynamics often play a role in the success and failure of wealth planning efforts. Personal conflicts between siblings can derail the process or blunt its effectiveness. Bringing an impartial third party into the discussion may soften the potential drama.
A professional mediator, financial planner, or estate planning lawyer can bring knowledge and experience to the asset planning discussion. These professionals can share their experiences of how families have preserved their wealth and brought value to the larger community.
At The Knee Law Firm, we help individuals at all stages of life plan their estates. Our professional guidance can determine the best way to continue your legacy after your passing. We are happy to consult with new clients in New Jersey. To set up an appointment, give us a call at 201-996-1200 or fill out and submit our online contact form.