In a previous article we discussed how in the “Perez” family had never discussed the patriarch’s Estate Plan, how the business was left to his wife and four children which eventually ended up in a legal battle for control of the business. Four years after the patriarch’s death, the two sisters and the mother who had never worked in the business were insisting on major business policy changes infuriating the brothers who had been running the business for years. The patriarch had wanted all his children to benefit from his financial success and had never intended to leave his wife and children in such a deeply conflictive situation. Could this have been avoided? And, if so then how?
As discussed in previous articles, few people like to discuss their impending passing and many, regardless of the size of their estate, refuse to make appropriate plans. There is a multitude of different reasons for this including the truly difficult tasks of facing one’s demise, figuring out one’s wishes, creating appropriate vehicles, determining the best time to move substantial assets to the next generation and discussing with one’s loved ones all of these matters. Just like in the Perez family, most often the needed discussions often just do not happen.
The estate planner of course is an expert in the legal and/or financial realms. His (or her) expertise may be in paying the least amount of taxes, creating trusts and other entities that preserve and hopefully enhance the wealth of the family. But they are not trained in human character or family dynamics. In fact, many shy away from discussing the impact of their recommendations on various family members or the family at large. And no wonder! Discussions like these may erupt into family feuds and hostilities. Often the patriarch does not discuss his estate plans even with his wife, never mind his children.
In reality, each person can choose three forms of dialogue. The first, and most common form is not to have any discussion. When the person passes away, the family meets in the attorney’s office for a reading of the will. The second route is for the patriarch to inform the family before he passes away. In this case the patriarch may talk privately or at some kind of family meeting with all the family members making clear his estate plans. The third route is to hold a family meeting where the estate plans are discussed and where family members are invited to share their hopes, feelings and wishes. The patriarch, of course, makes the decision but in this scenario he listens to the wishes of his spouse and children.
An interesting exercise is to imagine each scenario for a family that you know three years after the passing of the patriarch. If there is no discussion, what will you predict as to the future behaviors, self esteem and attitudes of each family member. How well do you see the family functioning in the future? If there is a business, how will it impact the business? About the lack of open discussion, some experts in talking to the patriarch put it this way – The Family will discuss your will and their inheritance. The only real question is – do you want to be present during the discussion?
What should Estate Planners do? They should help the patriarch and the family identify the consequences of their choices on the family and each individual. In particular, they should help the patriarch look at the kinds of choices he can make, the impact of these choices on the family and clarify the difference between tax advice and family enhancement. They should educate their clients into talking to their families about their values and how well their estate plan aligns with their values. They should encourage and if desired facilitate Family Dialogue!
Many Estate Planners are wary of Family meetings and rightfully so. If the Family Dynamics are tricky or explosive, encourage your client to utilize someone trained and skilled in Facilitating Family Meetings. In these meetings expect to talk not only about estate planning – but more importantly the values of the patriarch and the family the goals and aspirations of each family members and how the financial and other forms of wealth can best serve the family’s values.
Marc@sii-inc.net