Wealth Transition Planning Never Really Ends…
Wealth transitions affect people from different generations of every family, and often deal with ownership and control going from a small group of people to a larger one.
Each person brings their own desires, needs, and expectations, making this work fraught with potentially conflicting views and ideas. There’s no “one-size-fits-all” method, although many professional experts in a particular subset of the field may try to make you believe otherwise.
I’ve recently been involved in a few different discussions and activities that made me realize how much of this work defies a linear approach and is, in fact, very iterative and cyclical.
Few circumstances in this world lend themselves to a simple “do A, then B, then C, then D, and you’re done”. Instead, when you get to C, you may realize that some elements of A need to be revisited, and the work done in B may now be irrelevant.
And This Is All a Good Thing
Lest readers begin to think that I believe that this is bad, well, NO, it actually has to be this way, assuming of course, that you want it to work.
Indeed, oftentimes experts have “shoved” their A-B-C-D process onto an unsuspecting family, which makes everyone happy and relieved in the short term, only to see most of it unravel once the family needs to actually live with the result. With complex issues that involve so many parties, it is not realistic to think that a couple of people will be able to come up with the ideal plan for all right off the bat.
And even if you could, all those affected by it would not feel any ownership in it because they were not involved (or even heard) during its creation.
Planning and Governance Must Evolve Over Time
Whether we’re talking about structural elements of planning for which you involve experts in law, trusts, and taxes, or the family dynamics aspects that lead to what I call family governance, the same holds true.
You need to start by trying to figure out what you want, then you need to have discussions about it with those who will be affected by it, then you need to speak with experts and get their input.
Then you go around again, taking what you learned from the experts and sharing it with those who will be affected by the decisions. After getting their input, you can go back to the experts again with plan 1.1 or 2.0, and get advice again.
And then repeat.
Even when you have something that works and that all agree on, that will only serve for a certain time (although it could be for years) until circumstances have changed and a new, refreshed, and better suite plan will be needed.
Regular Dialogue Where These Subjects Are Safe
Back in 2020, in How to ACE your FamBiz Succession Planning, we looked at how Alignment, Clarity, and Engagement are important elements to keep in mind. I could have added that making sure your family has a regular forum where dialogue around these subjects is allowed, expected, and safe is also a key success factor.
We’re talking about important subjects that deeply affect the lives of every family member, so if you’re trying to do the best job you can for all of those people, you need to have them involved and do it in a positive and intentional manner.
Did Anyone Say This Was Supposed to Be Easy?
I know that the desire for an endpoint or “destination” is very strong, and nobody can “argue with” that.
But, assuming that you really want to prepare everyone and everything as best you can, then you really need to think about all of this as being more of a journey instead.
Try to enjoy the journey of planning for wealth transition, even though it will not always be easy.
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