Pathways: Matching estate planning to family culture

Some families do well in generational transitions, but many fail — and some fail miserably. Those who thrive from generation to generation are rare, but not as rare as some think. These families tend to be strong, resilient and deliberate. But most importantly, they are paying attention to the real threats to wealth. These threats revolve around failures of communication, trust, cohesion and preparation — which can be summed up as failures of family culture. By addressing these breakpoints, you begin to eliminate the greatest cause of the loss of financial wealth — failures of family culture..¹

These families understand that successfully navigating wealth is a bit like flying a jetliner — two well-matched wings are required. These are the wings of structural estate planning on one side and family preparation on the other. One strong and one weak wing won’t do. Failure of either wing is catastrophic. Yet in many families who flounder, the “planning wing” has received disproportionate attention — trusts are established, advisors are in place, tax strategies are adopted, investment approaches are calibrated. The planning is superb. It all looks terrific on paper. But these complex structures comprise only one wing of the plane, and the other equally important wing — the wing of family preparation — is neglected.

Different family cultures require different estate-planning structures. Creating estate-planning structures that match your family culture is critical. Identifying misalignment between culture and structure can help families — in collaboration with their professional team — understand the importance of preparation for the plans that have been created. This practice can help mitigate everything from family legal battles to untoward effects of too much wealth by promoting positive family interactions and outcomes.