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Heritage Statements Help in Estate Planning

Roy Williams and Vic Preisser, authors of Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, gathered data from more than 3,000 families who had lost their wealth. Poor planning and investments caused the reversal of fortune in fewer than 3% of the respondents. But 25% said heirs were unprepared, and 60% said it was a lack of communication and trust in the family.

These findings were highlighted in the Barron’s article, “Preparing for Inheritance: How to Avoid Losing It All,” which also notes that smart financial, tax, and estate plans by themselves don’t create good stewards of wealth. Senior generations have to teach their heirs about the legacy they’re going to inherit, uniting the family unit around its accomplishments and civic engagement. When it does this, it has a better chance to preserve the family fortune as well as the family bond.

Communication lets heirs have an understanding of their predecessors’ values, responsibilities, and choices. This may reveal ideals, beliefs, values, and shared visions that might otherwise have been left unsaid and allows the family to foster a common vision to support a common purpose for future generations. Annual family meetings should be scheduled with a goal of promoting family harmony.

Eventually the family’s principal advisors, including those for legal, tax, and financial concerns, should receive a copy of a “heritage statement.” This is a formal document of the family’s story, values, and vision, and when it’s updated, the advisors should also get a new copy. A heritage statement should sharpen the family’s vision as it is to be shared outside the family. With a clearly defined vision, advisors’ recommendations can be coordinated with the family’s goals, beliefs, and values.

Your family can up its chances of maintaining wealth rather than destroying it with the use of family meetings and the heritage design process for wise financial and estate planning.

Contact a qualified estate planning attorney to assist you.

Reference: Barron’s (November 7, 2015) “Preparing for Inheritance: How to Avoid Losing It All”

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