More insights from Williams & Preisser's Preparing Heirs

More insights from Williams & Preisser’s Preparing Heirs

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Yesterday I shared a list of the top characteristics of families who successfully transferred their wealth from one generation to the next.

Perhaps the most important summary characteristic: all family members–including spouses–are involved in the legacy planning process. In addition, the family has developed what Williams and Preisser call a Family Wealth Mission Statement (what I believe Link calls a Family Wealth Letter of Intent: although Link seems to encourage more privacy or–depending on how you look at it–secrecy on the part of the parents; less openness à la Williams and Preisser).

Williams and Preisser, however, list some additional characteristics of families who are well-prepared for successful wealth transfer. Besides Wealth Mission Statements and full family participation, you can recognize a family that is well-prepared for successful wealth transition by (what I’d like to call) its social health.

According to Williams and Preisser, a family is well-prepared for successful wealth transfer if and when they demonstrate . . .

There are no “taboo” topics; family members will talk about anything.
The family is able to talk and take appropriate action even on emotional topics.
There is a high degree of trust and personal care among/between family members.
There are open discussions and commitments by all family members regarding promises, requests, and reliability. There is no “pretending” when it comes to level-of-competence concerning skills members require if they are to fulfill their commitments. [This issue has to do, for example, with, say, evaluating an outside contractor’s (trustee’s, attorney’s, financial advisor’s, etc.) performance, or making recommendations for philanthropic gifts. . . .]
There is minimal gossip within the family. Most conversations, including criticisms, are open and above-board.
When breakdowns occur, discussion and mature dialog can be heard throughout the entire family.
The family has a clear mission for its wealth, and all members can state it accurately.
Family members are active in the family philanthropies and philanthropy is an integral part of their planning strategy.
Heirs have a long-range vision of where they fit in the family mission and know what is expected of them to qualify for any role they choose, as well as the meaning of commitment. [pp. 100-101]

My sense: In our family, in general, the “inner 6″ of us, at least, do pretty well (I think!) with the first six characteristics; we have hardly begun with the last three.

Another checklist has to do with heirs and how well prepared they are to inherit.

Heirs are prepared to inherit if and when . . .

The family has decided upon a strategy to implement the Family Wealth Mission statement.
The family has defined the roles needed to carry out the strategy. (Roles might include bookkeeping, evaluating charitable opportunities, secretary for family meetings, etc.)
The family has established specific measurable and observable standards (education, experience, family relationship, etc.) and competence levels (”Beginner” to “Virtuoso”) to determine qualifications for each role.
Heirs and current family leaders are in agreement on the application of standards and competencies for the defined roles.
Heirs have selected specific roles and declared their interest in preparing for and serving in those roles.
Heirs aspiring to the same roles have resolved their conflicts amicably.
Heirs designated as candidates for identified roles have accepted the specific preparatory programs designed for their roles.
The candidate-heirs are either engaged in or have completed their preparatory programs.
Participants have agreed upon alternatives in the event candidate-heirs fail to meet their preparation timetables. [pp. 112-134]

I thought all of these insights were fine. And I gained one piece of an action plan I had not incorporated before (i.e., I am convinced we do need to include everyone in our discussions, including spouses). BUT . . . Williams and Preisser’s insights seemed rather “theoretical” compared to Hughes’ Family Wealth. Hughes blew me away. . . .

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