Managing Estate Goals in The Family Business

12-9-14_managing_estate_goalsIn life there will be major goals, and supporting goals. Major goals should be set in the areas of business (including career, family business), finance (including family wealth), education (including what it means to the family and how it will be paid for), family (marriage, children, extended family), creativity (artistic, visionary interests), physical care (health and exercise), public service (issues of importance), faith (religious services, education and participation), and community (whether the community is local such as the town or city, or virtual through other connections).

These goals all connect with each other and when built together, create a sustainable family system grounded in the “true north values” – the course the family wants to go, as well as its ultimate destination and arrival time.

The goals should align with the fundamental values. For example, if the fundamental family values are entrepreneurism and a sense of family safety and if a major goal is to establish a profitable family business in the local community that will employ and support this generation and following generations, then each of the areas referenced above should be explored as part of the goal-setting process.

Goals will change as life and generations change. In some ways legacy goal setting (at the Meta level) is akin to Maslow’s hierarchy of needs. However, at the foundational base are the true north values that each family has. The goals and objectives build from those values and plot the course for the future shaping of the legacy.

These goals will include financial safety and survival, and then when congruent with the true north values will lead to sustainability and perhaps affluence. Financial security or affluence may lead to a greater desire to take care of the community and world at large. Of course, for most families this is not linear; it is just that the emphasis shines on different phases at differing points. Many families know what their true north is, work hard, have faith, and give back to the community and world at large. It is just that the amount of emphasis placed on each sector changes as the need the sector faces changes.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Using a Will to Focus on Family Values

Will Image, ethical willsWriting an Ethical Will in addition to the conventional, legal one that is the centerpiece of all estate planning can give you a chance to focus on your family’s values and its true north. These wills focus on spiritual legacies in addition to the material ones. Also known as “value” or “mission” statements, Ethical Wills can be very important in crystallizing family values:

  • They can describe religious or moral values you believe are important to share with subsequent generations.
  • They enable you to describe yourself, to personalize and pass on some of the important “life lessons” you have learned.
  • They can serve as a source for recording details of your family history that might otherwise be lost forever.
  • They give you a chance to explain to your heirs why the philanthropic donations you have made have been so important to you.
  • They enable you to share with your children and grandchildren cherished memories you have of them, and to let them know personally how important they have been to you

Ethical Wills give you the chance to be remembered the way you want to be remembered, and they give you the chance to articulate the values that you want to endure in your family as the generations pass

An alternative to a written ethical will is a video legacy. As Iris Wagner of Memoir Productions (www.MemoirsProductions.com) asks, “Do you wish to communicate with future generations about your heritage, your values and beliefs? Would you like to reflect on your life story and tell it ‘from your lips’?

As a lasting legacy, shouldn’t your story be told by you on camera?” The act of preparing an ethical will allows you to preserve your family’s non-financial legacy. As Iris points out, an ethical will benefits both the narrator and the recipient. It benefits the narrator because it is a celebration of life by which the narrator focuses on meaning, perspective and purpose. It is an open communication with important people. An ethical will clarifies family values, convictions, priorities and goals. For the narrator an ethical will can lasso, heal the past and resolve conflicts, leading the narrator to forgiveness and peace. An ethical will also benefits the recipients. It is a guidepost to living through the sharing of wisdom and enduring values. It improves relationships and clarifies relationships. An ethical will sends the family recipients messages of love which can be quite helpful when they are grieving and healing. It is a perpetual legacy of shared and strengthened values, memories and connections.

In addition to understanding your family’s values, it’s important to be aware of any ghosts that may be lurking in the family closet. Every time a new client comes to me with an extremely complicated situation, I sense a ghost. I am not sure whether it is “Caspar the Friendly Ghost” or a scary ghost, lurking in the attic.

I do know that the ghost impacts the way that the family is operating and how its members communicate. After 30 years practicing estate planning law I know that if I do not pay attention to that ghost, the solution I offer will not help solve the problem and may, in fact, make that problem much more significant.

So when that client is sitting in front of me with a tangled story, I listen and carefully observe what is not being said as much as what is being said. I understand that even though the family may be coming to me for a legal solution to its problem, the reality may be that the problem and the solution are not legal, and should be addressed by a different kind of professional. It is, of course, emotionally safer to visit a law office and speak about how to solve a problem legally than it is to deal with it on a more personal level. But that is not what law or lawyers are supposed to do. The legal structure can enable a plan and allow goals to be implemented, but it cannot address the fault lines of emotional family issues.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Stay The Course: Establish Your Family’s Fundamental Values!

“It’s humbling and enthralling to know your legacy when you’re alive”. Laura SchlesingerStay the Course sign, family unit

 “Family is not an important thing. It is everything.” Michael J. Fox

Every family (whether its members know it or not) has a “true north” – guiding values that are part of the DNA that holds the family together and makes its legacy what it is. These are the values that have been embedded and blended through generations. In every family there are two sets – the values that matter when the family interacts with each other and the values that matter when interacting with others. Sometimes these overlap, and sometimes they do not.

Although every family has these fundamental values, not every family is aware of what they are. Sometimes they are assumed and lie dormant until there is a sudden event that shocks the system, forcing the family to address its values and legacy. The shock may be negative – a divorce, a huge financial loss, a physical tragedy or the death of a key family member. The shock may be positive – the sale of a family business leading to significant liquidity, winning the lottery, marriage, an inheritance.

It would, of course, be much better to think about your family legacy before a shock happens. Take the time to focus on what your family stands for, what you would like to transmit to subsequent generations and how you would like your family to partner with the larger community. Intentional legacy planning creates a stronger family unit. It is easier for those entering the family to understand what the values are if the family itself has focused on what the family stands for and begun a plan to implement it.

When learning to sail, a novice starts out in calm water in a boat that cannot overturn. As the skills advance and as the sailor understands the interaction of the compass, the team on board, the boat, the sails, the wind, the weather and the water, the sailor will advance – from a pond to a lake to an ocean and, if very adventuresome, to a trans- Atlantic cruise. As the journey becomes more complicated, so will the team on board, the boat, and the sails. The wind, water and weather will always change, but the compass will always point to true north.

I remember one of the first times I sailed on Cape Cod. I was a teenager and had taken sailing lessons at Stone Horse Yacht Club in a small sailboat known as a Waterbug. It could not tip over, and in the inlet I had enough confidence in my expertise to convince my younger sister that it was safe to crew on my maiden voyage. We never got out of the canal. The cross winds were quite a bit harder than sailing on smooth water in the inlet. There was a restaurant, Thompson’s Clam Bar, on the side of the canal. After watching me turn the boat around in circles and go nowhere for more than an hour a man having lunch went down to his motor boat and towed us out to the open ocean. My sister made us stay out there for 3 hours until she was sure that everyone who had been having lunch at Thompson’s and witnessed my lack of prowess had gone home. By dusk we made it in safely.

Learning to sail is an acquired skill. It takes attention, diligence and practice in different waters. To be very good you must sail through squalls, and you must make plenty of mistakes and then right your course. This is, of course, true in life too. The compass will point to north but getting there requires attention, discipline and practice. If you tried to sail the open ocean without a compass you would be flirting with disaster. If you try to lead your family without a clear understanding and focus of what your fundamental values are, you will be flirting with disaster.

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Who Will be the Captain of Your Estate Planning Ship?

Excerpt from Patricia’s new book: It’s More Than Money: Protect Your Legacy

“The thinking that created today’s problems is not the thinking that can solve those problems.” ~ Albert Einstein

9-14-2014 It's More Than Money Book CoverYour life and the legacy of your family is a movie (with sequels), not a snapshot. Why then do so many of us view our family values, financial decisions and legal documents as stand alone decisions that do not correlate with each other, are not compared to each other and are not integrated?

In my thirty years of practicing law and working with many families and family businesses in estate planning I have come to the conclusion that the most important role the head of the family can play is “Captain of the ship”. Effective planning is a bit like sailing.

When a captain sets off for a long sail, he needs to understand where he is going, how he is getting there, and what may occur along the way. Nature will always intercede. Weather and winds will change; storm waters and other hazards may lie ahead. But what is important is to set the plan and then stay flexible and keep checking the actual course against the planned course, and while doing that, to keep in mind the position of the compass set to “true north” – a fixed point centered on the values that are most important to you.

The elements of sailing are the foundation (an internal compass set to true north), goals and objectives (the mapped course) and the enabling structure (boat and sails). It is the responsibility of the Captain of the ship to be aware of all external forces (ocean, weather and wind) while sailing. The one element that is fixed is the direction of the compass – set to true north. All other elements must be congruent to true north and to each other. That gives the journey the best shot at success and sustainability.

For a family, sustainable planning includes the same elements – the foundational elements (values e.g. family first), the goals and objectives (how those values will be translated in life – family business, family investments, philanthropy, family activities) and the enabling structure (legal estate and business planning documents, financial investments and the team of advisors).

It is the responsibility of the family leader (the Captain) to be aware of all of these elements in the context of all external forces (changes in family members, changes in advisors, world economics, and business risks) while navigating life and legacy. These elements must all be congruent to the foundational family values and to each other. That gives the family the best shot at sustainability and legacy.

For many families the elements are done independently – with separate advisors who do not know each other, never speak and do not have direct knowledge of what the others are doing. And for many families at least one of these elements may not be done at all or may be quite outdated.

For a plan and its legacy to be sustainable, the elements must be integrated and congruent. The legal plan should align with the family goals and match the legal and financial documents. If your family is connected by a family business, real estate or philanthropic endeavor, is the estate plan for the family system in agreement with its financial plan and the family objectives? A congruent plan increases the probability of sustaining what that family has worked so hard to put in place and builds its legacy.

For most families the answer to this question is “no”, but not for a lack of effort. It is because a plan is built up over many years by many independent professionals – the estate planning attorney, the accountant, the financial planner, the banker, the life insurance professional, and the philanthropic advisor – each focused on a different part of the system. Even though their work may be independently excellent, most of the time they are responding to a need that was expressed in a certain time frame – minimize estate taxes, determine who should control the vote of the company stock, equalize the assets, protect assets from a child or sibling divorce, etc. Even if the “team” communicates well at these independent junctures, it is unlikely that communication is deep or continuous.
Professionals focus on what they know. Every well-meaning and talented advisor goes back to his/her specialty to answer a need or solve a problem. Some families have a family office or trusted advisor they are fortunate to work closely with.

Experience has shown that this improves communication but does not provide the unique perspective that can be viewed when zooming down on the system from 30,000 feet above. Perspective is important. It is only when the system is independently reviewed from on high – from that 30,000 foot level – that black holes in coverage – those areas that no family member or advisor thought of because each was focused on his own specialty – become readily visible.

No advisor can do that for you. It is your responsibility, as the family leader, to make sure all the elements of your plan are congruent, and the best way to for you to do so is to view the planning as Captain of the ship from that “on high” perspective.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

css.php