G____, our legacy planner, asked, “Suppose we were to say a family has successfully passed on its legacy to the next generation if two things, at minimum, are true: 1) the family’s wealth is still there when the first generation has passed away, and, 2) none of the members of the second generation have seen their lives destroyed due to improper use of funds; no family relationships have been ruined as a result of strife over money.

“Of families who use traditional financial and estate planning techniques and go no further, what percentage would you guess are successful, according to this definition, in the second generation? How many wealthy families still have the wealth and are still relationally intact in the second generation?”

“Maybe one or two percent?” I suggested.

Read the rest of this entry »

As I noted, our investment advisor has been urging us seriously to consider hiring a Legacy Planner. (Note the difference between legacy planning and “mere” estate planning I described in my Estate Planning v Legacy Planning post.)

G_____, the gentleman whom our advisor recommended, presented a couple of graphics that I think give further insight into some of the differences.

Here I will present only the “Legacy Planning Pyramid”:

According to G____, “traditional” financial and estate planning comprise the first two layers of the Legacy Planning Pyramid.

Read the rest of this entry »

Despite my stiff letter Monday evening, S____ and G____ responded well and Sarita and I have decided to go forward with the first level, diagnostic and goal-clarifying services. (See also this additional goal-clarifying service. It wasn’t available in quite this form when we went through the program in February 2007, but it gives you a good idea of the kind of clarity one might hope to acquire. –JAH, 5/5/08)

As G____ explained, we are under no obligation to keep going forward with additional or subsequent services if we are unhappy with the results of the first round.

(My problem–and I stated this clearly: I don’t see the value of the diagnostic if we aren’t going to move forward toward actually planning something! –Still, G___ said, we should feel no pressure.)

So, under those terms, we have agreed to move forward.

G___ will be our legacy planner . . . with the aid of T___, whom he mentioned in our first meeting.

So I met with our investment advisor and prospective legacy planner. I just wrote the following letter to these two men. I want them to know “where we’re coming from”:

Dear G___ & S____:

You’ve got to understand that Sarita often takes hours or days to mull things over. Today, it has taken only hours.

I think you need to know what she has said. Obviously, her comments impact me. I’d appreciate hearing your (either or both of your) responses.

Read the rest of this entry »

Our investment advisor has been pressing me for several months not only to do legacy planning, but to hire a professional advisor to help run us through a structured legacy planning process. Yesterday, during our regularly scheduled monthly performance review meeting, he “surprised” me a bit by inviting the legacy planner in to share just a bit about his approach.

Yipes! He wouldn’t say exactly what his fees are, but he gave me an idea. It’s a lot of money. Several thousand dollars to start. And then, I get the idea, more later.

Read the rest of this entry »

When should the funds God has entrusted to us be passed along . . . and to whom?

Sarita and I have been challenged to consider whether we should “dump” large sums of money on agencies now, or, rather, “trickle” them out a bit at a time: put them in a foundation, for example, and distribute five to eight percent of the principal each year, with the expectation that the principal will grow at a rate faster than the distributions. . . .

In favor of the former idea, we consider:

Read the rest of this entry »

A couple of weeks ago, Sarita and I were at a conference for major donors sponsored by one of the charities we support.

Henry Doorn, president of the Barnabas Foundation, noted there are only three places your money can go when you die: to your heirs (family, friends), to charity, or to the government. He didn’t quite put it this way, but my mind put his follow-through question in the form of Evangelism Explosion‘s standard opening. As I remember it, he asked, “If you were to die tonight, do you know for sure where your money would go?”

Sarita and I spent a lot of money back in 1998-99 getting an estate plan put together. But when Doorn asked the question, I realized, in my heart of hearts, that I didn’t know the answer!

I knew we had done everything possible to minimize taxes and maximize transfer to our heirs, our children. But we had done nothing to ensure anything goes to any of the charities we care about. And, worse,

Read the rest of this entry »

You know about investment portfolio management. And I’m sure you take time to ensure you invest wisely for financial returns. But what about eternal rewards?

Read the rest of this entry »