Thursday, October 30, 2014

Family Harmony as a Planning Priority -- Part 1: Distracted by Shiny Objects

Why is it that when we focus on money, we overlook things of greater value? 

In the midst of abundant wealth, it is easy for us to lose sight of what matters more than money.  The Gospels of Matthew, Mark, and Luke in unison warn us that a single-minded emphasis on riches may rob us of things of far greater worth.  “For what is a man profited, if he shall gain the whole world, and lose his own soul? or what shall a man give in exchange for his soul?”

This human tendency to concentrate on shiny financial objectives at the expense of more lasting priorities is an occupational hazard for professional planners.  Sometimes, with our own abundant technical knowledge, and surrounded by our clients’ abundant wealth, we professional planners focus too narrowly on laudable but lesser planning priorities and end up causing inestimable human damage

We sometimes sacrifice lasting worth on the altar of “tax avoidance.”

We are inclined to destroy long-term value in the quest for “asset protection.”

In the name of facilitating our clients’ “control” of their wealth, we may create plans that cheat our clients and their loved ones of soul-deep pearls of great price.

In my 35 years as a planning professional, I have observed that one of the most serious and frequent casualties of money-centric planning is family harmony.  Too often, the unintended but long-term result of our planning is to pit brother against brother, parent against child, and grandchild against grandparent.  Not only do our planning tactics not reduce discord and tension, we actually increase family strife and contention by the way we structure our clients’ affairs.

That may turn out to be a blunder of epic proportions.

Referring to the well-documented failure of over 90% of wealthy families to survive past the third generation, Courtney Pullen wisely observed:

The tragedy of this statistic isn’t the loss of the money; it’s the loss of the family that goes with it.  As the wealth dissipates, so does the connective tissue of the family, whose members often end up disconnected and embroiled in conflict.

Alex Haley, the author of Roots, put the significance of the family in perspective when he wrote: “In every conceivable manner, the family is link to our past, bridge to our future.”  I concur with Michael J. Fox, who said:

            Family is not an important thing. It's everything.

And with Serena Williams:

            Tennis is just a game, family is forever.

I agree with Buddha when he said that our highest priorities should be “to enjoy good health, to bring true happiness to one's family, to bring peace to all.”

The issue of promoting good health is a topic for another day.  But as for bringing true happiness to our clients’ families, and bringing peace to all, I feel certain that we need to re-think our planning strategies and processes. 

Please don’t think I am suggesting we need to become family therapists; I am saying nothing of the sort.  In certain cases, those specialists may need to be a part of the collaborative team.

What I am saying is that in our work AS PLANNERS we need to recognize the damage we may be doing or the opportunities to promote family harmony we may be missing as we craft estate plans, financial plans, philanthropic plans, or business succession plans.

We should have two major aims:  First, we must see that we don’t harm family harmony either intentionally or accidentally.  Second, we need to learn how to proactively improve family harmony as we work with our clients.  My next articles will address these objectives.

Next month:  Family Harmony as a Planning Priority — Part 2: First, Do No Harm