Estate planning is–or should be–about a family’s pecuniary interests, of course. But what about the things that money can’t buy? The best estate planners say you should deal with them. But these same planners, it seems to me, have a difficult time explaining what, exactly, these “other” assets are, how, exactly, these “other” assets can impact an estate, and what, exactly, you should do to maximize their benefit for future generations.

Gerald Le Van wrote an article for the American Bar Association’s Experience magazine (Summer 2006, p. 28) titled “A Family Council for the ‘Relational Estate.’” I think he begins to unpack the meaning of these “other,” intangible assets very well. He suggests that some of them are comprised of the family’s “relational estate.”

Ironically, “relational estate” was first coined by divorce lawyers to describe the remnant relationship between ex-spouses that survives their divorce. Their continuing “relational estate” affects children and extended family, a web of shared friendships, and their participation in such post-divorce events as graduations, marriages, births and funerals. . . .

He illustrates some of what he means with respect to relational estate in a non-divorce situation by suggesting the kinds of questions heirs might be called upon to answer.

If, for example, the estate includes a business and the inheriting generation consists of, say, four people, all of whom get married, and all of whom have children:

• Who is family for the purpose of making corporate (“family”) decisions? Should spouses of the inheriting generation be permitted a say concerning the business? If yes: what about if the spouse is widowed or become a widower (i.e., the initial family member dies)? How about fiancé(e)s: should they have any voice? . . . Oops! One member of the inheriting generation does not get married, but lives with a non-marital partner: then what? . . .
• Second-generation heirs (or potential heirs): What if one of the first generation heirs marries a divorcé(e) . . . who has children of his or her own coming in. Are–or should–these non-marital children have authority? . . .
• Does the (larger) family have any responsibility to support chronically sick or disabled family members? If so, to what extent? How should the family’s support be expressed?
• What about members who are engaged in self-destructive behaviors? How should the (larger) family deal with them? Or should it?
• What about alienated members of the family? Should they have a role? And what kind of role should the larger family seek in their lives?
• How–and how strongly–will the family encourage education?
• Any unique family commitments to philanthropic endeavors?
• Will the larger family play any role in divorce proceedings or intra-family disputes? . . .

If you think about these and other similar questions, you realize that

1. The relationships mentioned here have value to the family as a whole and to the members of the family–either positive or negative. In other words, the relationships themselves are family assets . . . or, potentially, family liabilities.

Moreover,

2. The answers to the questions will arise from the underlying and controlling personal values of family members. [Question for the testator[s] who create the estate to consider: Will the underlying and controlling values be yours . . . partially because you sought, deliberately and conscientiously, to pass them on? Or will they be someone else’s?] –And this, too, should indicate that, if you’re the testator, your values, too, are–or can be–assets to the family . . . or liabilities.

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This entry was posted on Friday, August 1st, 2008 at 11:03 am and is filed under estate planning, heritage, inheritance, legacy, legacy planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.