Right Plan Can Bond Your Family Together

Child, aged 6-7, and woman, aged 33, sticking buttons on a picture together in a family kitchen. — (Image credit: Alistair Berg)

Ask people what the single most important thing in the world is to them, and most will undoubtedly respond – without much hesitation – that it’s their family. In fact, some would say that family is not simply the most important thing, it’s everything.

My Family Drives Me (Financially) Nuts

I once worked with a three-generation family who enjoyed each other’s company and had fun together. But they continued to get stuck when trying to "operate” together. For example, while all members were very philanthropic, they often argued over how to give, when to give, what to give and to whom to give. Looking at this situation strategically, it was clear to me that the family did not have a common purpose or mission. They had not taken the time to talk about their individual goals, yet alone their collective family goals, for giving. They were also struggling with how to handle the many requests rolling in, especially with how to say no.

With these clients, my goal was to get them talking and working as a team, but that isn’t as easy as it sounds. Despite the fact that our families are so important to us, the reality is that most of us tend to take our families for granted. We assume they’ll always be there – no matter what – because, after all, they’re family. In reality, most people tend to function on autopilot when it comes to family. Candidly speaking, we don’t act with the same degree of intention regarding our families that we do in other contexts.

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In business, we invest significant amounts of time and money on team-building exercises to get everyone on the same page and join as a group. We spend time on team member development to cultivate the capabilities of each team member. We do executive coaching, training and other skills-building exercises – all of which may be grounded by a set of core values to guide business operations.

Employers can be very deliberate in developing their employees’ skills and helping them work together to more effectively fulfill the company’s mission and vision, acting in accordance with the employer’s stated values. Note that none of the elements listed here are financial, they’re all non-financial elements. The focus is on relationships and the qualitative side of the ledger.

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Obviously, there are significant differences between families and businesses. The intent is not to suggest that families should try to operate like businesses, but to reflect on the impact that it could have on your family if you were more deliberate in designing your family’s future by focusing on non-financial, qualitative elements.

What it takes to be an ‘Enterprising Family’

What is an Enterprising Family? In my experience, an Enterprising Family has 10 key attributes:

Addresses both the financial and the non-financial complexities of wealth as part of its wealth planning.
Focuses on strengthening the family, as well as sustaining its wealth.
Recognizes the worth of its human, intellectual, social, spiritual and time capital, as well as its financial assets.
Is grounded in a set of core values or guiding principles.
Has a shared purpose and vision, and actively works a strategy to achieve its goals.
Takes the long-term view, planning three or more generations into the future.
Understands that generational transition is a process, not a transaction or an event.
Realizes that the process takes time – and that time is promised to no one – so the family starts early.
Involves those who are the future – who will have to live with and implement any plans created – in strategic planning for the future.
Values life-long learning and invests in the ongoing growth and development of family members individually and collectively.

Getting out of autopilot mode

Enterprising Families take the time to ask probing questions and develop protocols, processes and structures that other families rarely stop to think about, let alone act on.

With my clients who were struggling to “operate” together, the way we overcame obstacles took some work. But in the end, a simple planned giving policy, developed through family meetings and dialogue, helped solve their dilemma and allowed them to move forward. Note how this took a level of intention. It took some work. It took a willingness to get out of autopilot mode.

In my previous column I shared research illustrating the vast majority of the reasons for the failure of generational wealth transfer are non-financial. And, it demonstrated that there can be consequences if families do not exercise a high degree of purposefulness regarding the non-financial elements of their lives. Is it worth the effort to become an Enterprising Family? If you desire to super glue your family together, I would say yes.

What comes next

In future columns, I will lay out key concepts designed to help your family create a framework in approaching Family Dynamics. We will continue by exploring:

How can we transform into a cohesive family? Understanding families as complex emotional systems.
Naming the unique complexities of families of financial wealth and learning how to navigate them.
Embracing the multiple dimensions of wealth, or “family capital,” rather than seeing wealth as financially oriented only.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Katherine Dean is the Head of Family Dynamics for Wells Fargo Private Bank. Dean leads the ongoing evolution of the Family Dynamics program curriculum as well as the management of the Family Dynamics team that is distributed across the country. The Family Dynamics team helps families sustain their wealth across generations, by facilitating decision-making about the complex issues that arise as a result of substantial wealth.