It has been said that the definition of crazy is doing the same thing over and over again and expecting a different outcome.
That's exactly what Americans have been doing for generations when it comes to passing wealth along to loved ones – and the results have been crazy.
Studies have demonstrated that ordinary financial planning doesn't work.
A recent analysis conducted by a consultancy group found that seven out of ten wealthy families will have squandered their fortunes by the time the second generation takes control of the finances. And it doesn't stop there: By the time the third generation gets their greedy hands on the money, 90 percent of the wealth will likely be gone.
But that's not the worst of it.
The worst part is that ordinary financial planning doesn't just destroy hard-earned wealth; it can destroy entire families.
Feuds erupt. Power struggles emerge. Siblings who were once close no longer speak. Traditions and family gatherings are tossed aside in favor of solitude.
A big part of the problem is that ordinary financial planning simply doesn't allow you to ensure that your children, grandchildren and other heirs are well-prepared to handle the inheritance they'll receive.
It also doesn't necessarily afford you the opportunity to let your loved ones learn to live the values that allowed you to build your wealth in the first place.
In other words, both your wealth and your legacy are put in jeopardy when you use ordinary financial planning.
So why not go beyond the ordinary? Why not explore heritage planning as an option?
Heritage Planning: Leaving a Lasting Legacy
While ordinary financial planning is all about the money, heritage planning is all about your family.
It involves preparing your family for the future – whether it involves a great deal of wealth or not. Rather than focusing on who gets what, you focus on family meetings and activities designed to unite brothers and sisters, nieces and nephews, sons and daughters.
Next, you establish a family governance structure, which is a formula that has been used for centuries to help families live long, emotionally healthy and virtuous lives.
The purpose of establishing a strong family governance structure is to allow you to mentor younger generations, share stories that highlight family values, and make sure that the next generation will have a leader in place who can hold the family together, advocate for the family and have the skills and wisdom to ameliorate conflicts when they arise (and it is a when, not an if).
Once you have established the family governance structure, it is time to involve your advisors.
It's important to choose financial experts who understand and value heritage planning because your decisions will be made based on what is best for the family and its future –not with regard to tax or financial strategies.
This is by design.
Remember, ordinary financial planning – focused almost entirely on money – does not work 90 percent of the time.
What Does Work: Heritage Planning
Heritage planning requires you to make decisions that lead to family unity, strength and harmony. These are the things you want for your family, and the wealth you have worked so incredibly hard to acquire is only a tool to facilitate them.
Don't let it be a tool that can be used to tear your family apart, which so often happens.
Instead, use heritage planning to create a lasting and positive legacy for your family.
If you are interested in learning more – and in protecting your family's future financially and otherwise – connect with us and we'll help you to see the big picture.
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