Many wealthy families desire a seamless transition of their wealth and a perpetuation of their values for multiple generations, but many struggle with how to accomplish these goals effectively. Successful families typically take intentional steps to create family meetings that foster communication, education and engagement, in order to promote collaboration and trust among family members.This article provides a number of key elements to consider when developing a successful family meeting.
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It can be surprising to hear that just 30 percent of families successfully sustain their wealth beyond three generations. The reasons for wealth transition failures are generally personal rather than technical—resulting from a breakdown of communication within the family, inadequate preparation of heirs, and lack of a shared family vision. Successful families consider the impact of wealth on their family and look beyond financial capital to consider human, intellectual, and social elements of unique wealth.
What do people really mean when they talk about “impact investing?” Why do people make impact investments, and how do they do it? What counts, and what doesn’t? This primer provides family enterprises with clear explanations of the “why,” “how,” and “what” of impact investing. Whether families are just dipping their toes in the water, or ready to dive in, families can make more impact investments more effectively.
The expression “an elephant in the room” is readily recognized to mean an uncomfortable situation not talked about but clearly known to all. When elephants make unwanted appearances—at family dinners, social gatherings, meetings—people get uncomfortable and begin to shut down. When this happens, they begin to operate from assumptions and draw conclusions based on their own perceptions. Overtime, these actions may cause family relationships to erode.
All business owners will transition their business at some point in the future. Whether it is a transfer within their family, such as to the next generation, or to an existing business partner or employee, or sold to a competitor or outside investor, transition will occur. Just as successfully run businesses do not happen overnight, transitioning well cannot happen without devoting the necessary focus and intentionality.
While wealthy families prefer to pass nearly two-thirds of their wealth to their children, grandchildren and other heirs, they grapple with a fundamental question: Can their wealth benefit their generation and be passed on to future generations while also having a positive impact on those future generations? Experience shows that sustaining family wealth is indeed possible when families begin to see their wealth not only as a series of activities that need to be performed, but also as an enterprise that needs to be managed.
If a premarital agreement is a prerequisite to getting married, doing all you can to ensure that your agreement will be upheld against a future challenge should be your guiding priority. Accordingly, there are some helpful tips—the do’s and don’ts—to consider with respect to a premarital agreement. When thoughtfully negotiated and wisely drafted, a premarital agreement should ultimately satisfy both parties. However, if this is not possible to achieve, other alternatives may be available to provide adequate protection of your premarital assets.
Charitable planning can be an important part not only of managing income and estate taxes, but of engaging the family and strengthening family values. Adding in a multigenerational component can make it even more meaningful and compelling. Just as every family is unique, so is the philanthropic approach where communication is key and there is more than one way to involve a family in philanthropy.
For many families, discussing wealth transfer and inheritance issues can be challenging. Fear of demotivating heirs can cause wealth holders to withhold vital information. But the rewards can prove significant when family members work together to overcome their fear by improving communications and strengthening trust. While every family is unique, there are some best practices among families who have decided that having an inheritance plan—including responsible ownership education—is better than no plan at all.
As individuals progress in their careers, success becomes tied more to their ability to collaborate, engage, and mobilize others than on the individual skills and abilities that may have fueled early-career advancement. Given this progression, there are five top areas and leadership skills that next generation leaders should focus on to position their organizations for future, sustainable success.