FAMILY WEALTH SUMMIT : the perfect idea wealthy families are afraid to do

Are you a high net worth individual who is leaving tens of millions or hundreds of millions of dollars to your family in your estate plan?

Maybe you have a massive family trust that you are creating or maybe you are transferring the family jewel-a multi-million dollar family business that you started from scratch. Who will run the business? Who will oversee the family wealth and be charged with maintaining and growing it? Who will protect it ? Who will take over for you?

You have money – vast wealth, actually, in your case – to leave. And it concerns you.

It should.

How that money that you leave on your death, is used, spent or mis-used, by your family, your descendants is important, isn’t it?

Will the wealth ruin your family when you are not here to over-see it? Will inheriting millions and millions spoil them? Will being a beneficiary of a massive family trust change your kids and grandkids, and remove any incentive to work or be productive?

Whether you are a billionaire or a client living in a small Florida condo, with $3 Million, people with money struggle with leaving family wealth — how inheritances will affect family members and family relationships.

Here’s one way, right now, to address (confront?) the issue of how your wealth will affect family members when you are gone: have a family wealth summit.

Book a weekend in a great destination with lots of hotel rooms and conference rooms. Invite your family. Get them all in a room and talk about your wealth. Break them up and get them in different rooms and talk about the issues which are important to you.

The location needs to be somewhere other than your office or home. It needs to send a message that you are travelling or going somewhere out of the ordinary: somewhere serious. Send a message. If you don’t want a luxurious getaway to Palm Beach or Aspen or Big Sur, that’s OK: do it in your lawyer’s or CPA’s office. DON’T do it over lunch or dinner: it’s too serious for that.

There’s a lot you can do there. You can learn from others, like kids, and grandkids, what they may want or not want. You may believe that they will assist your private foundation when you are gone, but learn that they don’t have an interest in that just yet. You can discuss who wants the beach house and who doesn’t want to inherit it.

At the summit, you can also talk about your values, what is important to you. Don’t assume everyone knows. They don’t. This is your chance to tell everyone your dreams of how that family money will be spent and how that empire of family wealth will hopefully prosper and not crumble.

Use a facilitator. Someone who can lead groups, keep everyone focused and on schedule and who can sense when additional time is needed for the important stuff, while respecting but moving on from the tedious, or less important stuff. The facilitator may be a professional who you have never met: perhaps one with a human resources background or one who has an advisory practice for business owners. Let them guide and take charge. You are the boss, but at the family wealth summit, think of yourself, in some regards, as merely a participant. While the summit is all about you and what you want, try to make at least part of it about what the family wants. Can you give them an impression that they are in charge a little? The idea is to talk about what you want discussed, but don’t let it come off as dictatorial or strong-armed or condescending. No force-feeding of information or “this is how it’s going to be ” pronouncements. No pontificating.

Who to invite and who should attend? Choosing who to invite is easy. Who to exclude, of course, gets difficult.

Estate planning attorney? She should be there to explain how wealth will be passed down. Assuming you are creating a mega family trust, and some trusts for individuals or “families within the family”, the estate attorney may explain the trust terms, and why the money “goes” into trust, rather than outright and directly to the family members.

Invite spouses? If they are a parent of your grandchildren, it’s probably a good idea to include them. But how so?

What about fiancées? Boyfriends and girlfriends? Live-in lovers? Minors? What if a family member wants to bring her “friend” or his “attorney?”

Here’s how to handle family members who want to change your summit or bring non-invited guests. Be selfish. This is YOUR summit. After all, it’s your wealth. I find that those who don’t have the wealth, the in-law, or the one who marries it or is dating it, has the biggest mouth. The one who doesn’t have the wealth is the most concerned about it. And the loudest. They may be insulted if you don’t invite them, but you’ll get much more done.

So, consider having a family wealth summit schedule: a detailed agenda with different breakout sessions intended to address specific topics with specific attendees. The attendees can only attend the breakout session that you register them for. The agenda should direct what specific family members go to what breakout session.

You might have breakout sessions for those new to the family-fiancés and new spouses. Put all the in-laws into an hour session and have someone talk to them about marrying wealth. How about “Investing 101” for young children? Put all the minor children into a session on how to invest, save money, spend money wisely, the importance of an education. Those that are involved in the family business might attend another session, along with those who show an interest in getting involved in the family business. What about the family leaders of tomorrow? Have you identified who will lead this family into the next 50 years? You might have a session on leadership with the up and comers.

Consider having sessions where everyone attends. The first session, which opens the family wealth summit, should state the purpose of the summit, introduce the facilitators or those that are in charge of the breakout sessions, and the purpose behind each session. It’s OK to be selfish. After all, it’s your wealth, your family wealth summit and your idea to even have this summit. Stick to your agenda and avoid those that want to change it. You can always have a session closing the summit where participants are invited to provide written feedback on what topics they would like to see next year. This will give them a feeling of involvement and even a bit of empowerment.

Instill your values. Talk about what’s important to you. And what’s not. What brought you here? What values do you have to pass along to future generations? What type of life do you wish for them?

Many people who create wealth from nothing are leaders…..and control freaks. Most of you have great passion for things and an attention to detail. That’s, in part, what’s made you so successful. This is true even for matters after you are dead. You want things just right: the way you want them to be.

One the most difficult things for a wealthy mom or dad to do is to talk to your kids about money. Most of you don’t have the courage to do it.

If you don’t have a large family, or a busy family business, your wealth summit probably won’t be as involved as this writing suggests. It doesn’t need to be. It can be simple, but structured. Have a facilitator and at least an agenda of topics and timetables. Your estate attorney can play that role and should be there regardless. Your first family wealth summit may be as short as a half day simply explaining your estate plan and how your wealth passes at your death—-and nothing else. But I doubt it. Once you start talking, my guess is that your first summit goes the full day. Plan to order in lunch. By the end of the day, you’ll be planning one for next year.