Will Your Heirs Blow Their Inheritance?

1. Does your family have a mission statement that explains the overall purpose of your wealth; and did all family members participate in creating that mission statement? (Every family will likely develop its own mission statement. However, the general mission of a family is to help every member learn to achieve their own goals and to support the goals of everyone else in the family. This clarity helps the family focus on priorities and drop items that do not fit.)

2. Do all family heirs have the option of participating in the management of the family’s assets? (Successful multi-generational families gives heirs and their spouses the option of expressing their thoughts and wishes about how assets are managed. The idea is that the heirs will eventually be responsible for assets once the parents have passed away. So, they should begin to learn how manage those assets based on their level of competence and interest.)

3. Do your heirs understand their future roles, do they agree with those roles and look forward to performing in those roles? (After a family creates a mission for the family’s wealth, a strategy for achieving that mission is developed. Once the strategy is developed, then roles for heirs, spouses and other family members need to be defined to carry out that strategy. Successful multi-generational families then ask for heirs to express an interest in available roles. Each heir’s interests and abilities need to be matched to the roles that are available.)

4. Have your heirs reviewed the family’s estate plan documents? (A leading cause of disputes and litigation after a loved one’s death is misunderstandings over management and distribution of the family’s wealth. While this type of conversation may be difficult, it is better to do it now when you can explain your wishes. The alternative is for your loved ones to fight each when you are no longer available to explain the reasons for your choices.)

5. Does your family mission include creating incentives and opportunities for your heirs? (Successful multi-generational families encourage heirs to receive education and other learning opportunities and have incentives for heirs to develop resiliency and responsibility … rather than being dependent on the family’s money.)

6. Are your family’s younger children encouraged to participate in the family’s philanthropic grant-making decisions? (Successful multi-generational families use this practice to discuss family values. Children as young as 10 to 12 are encouraged to talk about what they feel is important.)

7. Do your current wills, trusts and other estate planning documents make most asset distributions based on the heir’s readiness, and not their age? (Unprepared heirs account for approximately 25% of wealth that gets lost when it is transitioned to the next generation.)

8. Does your family communicate assertively, meaning that communications are clear, honest, open, respectful, and direct – instead of ambiguous, insincere, gossipy, disrespectful, and passive-aggressive? (Successful multi-generational families consider family unity to be just as important as family financial strength. They also rely on trusted executives and employees who must be treated with respect if they are to remain.)

9. Does your family have regular family meetings and ceremonies? (Successful multi-generational families schedule times to meet on a regular basis to celebrate family traditions, discuss business and maintain relationships. It is best if these meetings and ceremonies are enjoyable and memorable so that children, grandchildren, and great-grandchildren will have positive memories of them.)

10. Does your family have a way of settling disputes privately? (Successful multi-generational families agree to settle their disputes using alternative dispute resolution, rather than through litigation.)

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