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.

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