Intergenerational wealth planning is a process, not an event. It takes time, effort and resources to construct capacity to grow and sustain wealth across generations. Process teaches the next generations to appreciate the sources of their family wealth and how it was earned and created. It is not merely a series a meetings that results in a document followed by no further interaction. It is a dynamic and intergenerational process that is constantly writing and rewriting the family wealth script.
This is fundamentally a long-term approach to the wealth as “patient capital”. It requires a long view of the sources, purpose and potential of the family wealth. Effective communication, regular family meetings, an understanding of shared family values and goals, and some system of decision-making are important requirements.
A growth-oriented mindset is a strategic mindset. Create a process designed to reveal your family’s goals and objectives and successful strategies and tactics will follow. In “The Naked Opus: Growing Your Family Wealth for the Long Term” I identify the SMRT strategic engine. After creating a family mission statement, a good process might include:
- Success in the achievement of the mission is made possible by identifying key personal and family goals;
- Meaning is brought to goals by setting clear objectives to break the big goals down into smaller, achievable steps;
- Recipes for action are established when strategies are created to achieve the objectives;
- Things that will be done to execute on the strategy are tactics.
Too often, estate planning starts and finishes with the things that will be done before any consideration has been give to what success will look like and how meaning will be brought to the plan. The cart is truly in front of the horse.
I recently published a second article in Advisor.ca entitled “Five Steps to Growing Your Family wealth for the Long Term: Part 2″. I hope you enjoy the piece.