For many wealth creators, amassing wealth took a lot of work, but passing down the knowledge and tools to the next generation for successful wealth transition can be an even bigger challenge. Wealth creators may not know how to start or know the best approach. Through an infographic and video, learn the best ways to pass down the knowledge and tools to the next generation for a successful wealth transition.
Family Learning
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Take the Long-Term View
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Revised Feb 2020Originally Published in 2014 -- As the scope of a business-owning family’s activities expand and the family grows across generations, the organic shift from a business-centric family to a family-centric enterprise or “family enterprise” begins. The family is faced with the issue of how to preserve the family wealth and well-being beyond the first generation.
Family Governance: Oxymoron or Opportunity?
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Family governance need not be an oxymoron. A conscious family governance system can help create an efficient and rewarding means of ensuring the family enterprise’s viability for generations to come. Therefore, any family enterprise that seeks to maintain and grow its wealth—financial, human, social, and intellectual—should consider creating a clear system of governance that is well-designed and flexible-but-durable.
Research tells us communication is the most essential ingredient for sustaining wealth across generations. But, cross-generational communication can be particularly challenging, especially within families of wealth. Each generation’s habits, beliefs, and ideals are influenced by very different experiences, traditions, and societal norms. So how do you bridge the divide? In a gathering of more than 80 women ranging in age from 21 to 91 at a weekend-long learning event, several insights and recommendations on solving the cross-generational communication emerged.
Successfully transitioning family assets from generation to generation is hard work. And for many families, talking about money or family wealth can be awkward and uncomfortable, or simply delayed, which hinders younger generations from absorbing the critical information and know-how that is necessary for a smooth transfer of wealth and responsibilities. Some families are reluctant to discuss wealth at all because they are afraid of ruining their children's ambition. However, there are ways to encourage open discussions while being respectful of that fear.
For families engaging in strategic planning, the proverbial questions remain the same… What does the rising generation need to know? How do we deliver that? What should we expect from them? Intentional families consider these questions for years. Others, due to unexpected life events, are rushed to get the rising gen members up to speed and ready to serve. This webinar covered the basic components of a family learning program, including what important topics should be addressed at what life stage milestones.
What Matters Most to You?
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The most problematic challenge wealthy families face is not how to make more money, but how to ensure that it lasts. This requires focusing on something other than money. Successful families, whose wealth lasts for many generations, follow five key practices.
Market research reveals that nearly 70% of intergenerational wealth transfers fail by the third generation and almost 90% by the fourth. These are compelling statistics which have become top of mind concerns for many families as they plan their wealth transition to the next generation. For Australian families, there are three key challenges they face when transitioning wealth. A closer look shows what they are doing to beat the statistics and ultimately succeed, beginning with preserving family harmony and unity.
How to Raise a Philanthropist
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By fostering the idea of giving from a young age, children can learn the value and joy in helping, sharing, and giving to those who have less than them. Instilling the core ideals of philanthropy in your children's lives can also help them develop a sense of purpose and self. The key is to educate and give them something to emulate.
Nothing says, “I'm not sure our marriage will last,” like asking your new fiancé for a prenuptial agreement. This situation can be made even more touchy if the parents of the bride or groom are the ones insisting on the agreement. However, if approached positively and created thoughtfully, a prenuptial agreement can have benefits for both partners and for the couple's relationship.