Perhaps you have heard of the “Great Wealth Transfer,” which has already begun in earnest. Over the next 25 years, approximately 45 million U.S. households are primed to pass an estimated $70 trillion in wealth to their heirs.
The number one question my businessowner and multigenerational client family leaders are asking about this historic wealth transfer is: “What can I do now to start preparing my heirs? I don’t want to wait until it’s too late.” Good question — here are three simple ideas to get you started on a rewarding family governance journey:
Articulate your values as individuals and as a family group.
A values inventory makes for a great exercise around the Thanksgiving table while serving the pumpkin pie. Use virtual values cards or pick up several inexpensive decks online. Invite each person at the table to go through the values deck and select their top fifteen values. Encourage each participant to share one of their values and their reasons for selecting it. Then, direct each person to whittle their list of fifteen values down to ten. Ask each family member to share another value and why it made the cut. Finally, direct each participant to cull their top ten values to just five core values. Invite each person to share their five core values with the group. Shared values among individuals can inform the family group’s core values.
Align family core values with philanthropy and charitable giving.
Family philanthropy is one of the most effective ways to begin family governance and heir preparation conversations. Gather the family around the breakfast table during the holiday season or on a milestone birthday. Family leaders, consider giving each adult child a meaningful amount of money to donate to a charitable organization of the child’s choice, with the guideline that the receiving organization should align with at least one of the family’s core values. Give the children some time to think and do homework. Reconvene the group in thirty days to share which organization they selected, why, and how the charity’s good works align with the family’s core values. Repeat this exercise on a periodic basis, perhaps annually or each time anyone at the table has a birthday ending in -5 or -0.
Expand your periodic family values & philanthropy gathering to include other topics.
Once you are in a regular cadence of meeting together to advance your values-aligned family philanthropy, consider expanding the agenda to include other topics of interest.
- Sharing family histories and genealogies
- Developing a family mission and vision statement
- Introducing the concept of parents making annual exclusion gifts to adult children
- Educational opportunities that correspond with the life events/milestones that the adult children are experiencing (first “adult” job, getting engaged/married, buying a house)
- Starting a family
- Starting or investing in a business
- Saving for the cost of college
- Taking a new career opportunity
- Basic estate planning
- And many others!
While the “Great Wealth Transfer” is inevitable, successful heir preparation is not guaranteed and rarely happens by accident. Achieving success necessitates a bit of forethought and effort. It is the work of years, not weeks or months. The best advice is to begin early, start small, and stay consistent. It’s a marathon, not a sprint.
Curious about preparing your heirs or dipping your toes into the waters of family governance? I welcome you to connect with us to learn more and begin the conversation.
