How are you communicating yourself to your family (and/or business partners)? Did you know that approximately 60% of failed business transfers occur because of lack of trust and miscommunication? Imagine all that you worked towards getting eaten up in legal fees. Knowing that you can prevent this from happening early on is critical to your wealth management and legacy plan.
Here are a few ways that you can begin the process of talking to your family and business partners about your financial expectations and wishes. This conversation will open the door to a larger discussion around how you want your wealth to generate ongoing positive impacts on society.
Let's do a little self-reflection: How do you use your wealth? Is it to mentor the next generation in your family or to guide the future leaders of your company? Do you use wealth to control your heirs and employees?
I strongly advise that you not let money be the elephant in the room. You can start the conversation of money by leading by example. Engage your family in MAJOR financial decisions. Just like the African adage about teaching a man to fish... If you provide your children and other family members with the tools in order to make sound financial decisions you can rest assured that they will use those tools.
As Randy Ottinger states in Beyond Success, "If the discussion of values beyond money has not been a part of the dialogue between parents and children at a young age, then money will ofen become the perceived goal for personal success."
How are you measuring success? Will your heirs know what to do with the money you leave them so that it can generate the greatest possible return (both financially and socially)? What tools are you leaving them? Please share these tools with the rest of the readership.
In one of the firsts posts I ask how you define family. Family no longer is the nuclear 2 adults, 2 kids, a dog and a cat. How are you communicating with your ex-spouse, your step-children, your ex-in-laws? All of these people, especially if there is a family business involved, should be a part of your communication strategy.
I was recently at a CAFE event in Calgary and the President of Superior Windows was a speaker. She is the ex-spouse of the son of the patriarch who started the family. In other words, she married into the family business and now she is President. It was because of the family's open paths of communication that this transition from her ex-husband to her was possible. It was also possible because of her business savvy and leadership skill-set (not to underplay her talents and strengths).
So what would this conversation look like from a business perspective (not family owned)?
Start the conversation with successors now. Just like your children they will need to know what kind of business legacy you want to leave behind when you transfer the company. In many cases, a strong community identity adds value to a company and at the time of sale is something that is a bargaining chip (depending on the value of the community partnership).
For more reading on this topic I recommend Beyond Success by Randy Ottinger and Preparing Heirs by Roy Williams and Vic Preisser (both of which are available through this site - click here).