As I noted last time, James Hughes says that a family’s wealth is contained, first and foremost, in its human and intellectual capital. Certainly sounds high-minded. But what difference might that make in practice? And how do you account for such wealth or capital? Read the rest of this entry »

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I read two books while on vacation the last couple of weeks: Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values by Roy Williams and Vic Preisser, and Family Wealth: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations, by James E. Hughes, Jr.

Preparing Heirs goes into depth about the research behind a number one of our advisors mentioned to us: in a study of 3,250 families with significant financial assets, 70% of them failed to transfer their assets successfully to the next generation. What does that mean? They either lost all their money, or they found that the money destroyed family relationships. It blew the family apart in the inheriting generation.

When I read Preparing Heirs, I thought it provided some good insights, especially into the causes of failure. Read the rest of this entry »

Sarita and I had a meeting today–all day, 8 am till about 4:30 pm, with a working lunch in between!–with G____, our legacy planner, and T____, a man who, it turns out, is a fourth-generation heir of a very large family fortune. T____ turned my mind a bit–or, actually, a lot–concerning the idea of “giving everything away” as much as possible (rather than possibly passing a [financial] legacy along to our kids).

In essence, he argued for the idea that money in a future generation’s hands can be used for good. And we should encourage them to use it for good.

Perhaps the most inspiring comment had to do with enabling our kids to do significant work whether or not they were paid decent wages to do it. Thus, as he said, Read the rest of this entry »