The family farm has been the bread and butter of American life for nearly 150 years.
Farms started by grandfathers were passed down through the generations, protecting a way of life for families and the country.
Sadly, though, fewer of the country's legacy farms are making plans for the future, according to a recent article in CountryGuide.
Avoidance, procrastination and a general lack of understanding of the importance of financial planning are chipping away at a great American institution--and taking with it many legacies.
Don't let the same happen to you.
In business, it's called succession planning, the process of developing new leaders who someday will replace current leaders when they move on to other opportunities or retire. In financial planning, it's called multi-generational planning, and it's used as a tool to protect both financial assets and family traditions and values.
Multi-generational planning takes traditional financial planning further by protecting both wealth and a family's unity. It goes beyond leaving your wealth for your children and takes into account your family dynamics, financial goals and the legacy you want to leave for your children, grandchildren, great-grandchildren and beyond.
And unlike traditional financial planning, it takes into account both the economic concerns and the emotional issues families face to ensure that all of your hard work--as well as your legacy--are not lost to the anxieties of affluence.
Protecting your legacy for generations to come
Like farmers who spent a lifetime working the land to care for their families' needs and accumulate wealth, you have toiled in business and investments in order to live a prosperous life. The last thing you want to have happen is to have your legacy tarnished by infighting, hurt feelings, and greed.
Multi-generational planning helps you address these concerns by factoring in the emotional issues associated with wealth. It forces you to think about and answer deeply personal questions around key issues that commonly rip families apart:
- Who are the primary beneficiaries of wealth?
- How fast should assets be moved to the primary beneficiaries?
- What can you do to prevent wealth from spoiling younger generations or creating conflict?
Multi-generational planning forces you to put in place safeguards to ensure that funds are spent responsibly. It also allows you to create a wealth transfer plan that can be adjusted to meet your future long-term care needs, desires and circumstances.
It's your wealth, and your needs should come first. But that doesn't mean you shouldn't take into account personalities, living arrangements, family structures and dynamics when making your plans.
In fact, being cognizant of your unique family values, traditions, personalities and dynamics is the best way to protect your family's legacy--and that starts with knowing the roles each of your family members plays within the family--and determining what role you want them to play in the future.
Training and mentoring
Everyone has a role to play in their family--some choose their roles, others roles are chosen for them.
Helping your family understand the role you expect them to play in protecting your family's legacy is important. It involves teaching them leadership skills, mentoring them from an early age about how to work with money and manage wealth, and teaching them the processes you used throughout your life to accumulate wealth.
This type of training and mentoring has been used on family farms for generations, and it's why generations of family farmers have existed.
Unfortunately, many families have moved away from it in recent years--and family farms are fading. Don't let it happen to your legacy. Practice multi-generational planning. Have a plan and pass on your legacy.