Despite all the time and effort that’s put into traditional estate planning, the results have been less than remarkable. Research has shown that 70% of a family’s inherited wealth is lost by the first generation of heirs, and 90% is lost by the following generation.*
A traditional approach to estate planning can be passive/aggressive—neither assertive nor interpersonal, but has a major impact on other members of clients' families without their input.
Traditional Estate Planning Is Essential…But Not Enough.
- The need to plan for the family and estate after distribution
- The need to plan for contingencies and address possible liabilities
- Lack of individual and group decision-making experience
- How the non-financial elements of your client's legacy will be transferred
What is an Enduring Legacy?
leg·a·cy [leg-uh-see] noun
The impact a person, family or group has upon the world.
endur·ing [en-door-ing] adjective
continuing, lasting, permanent, perpetual, steadfast, surviving
The lasting impact a person or their family has on the world.
The Five Elements of an Enduring Legacy
- The Family Element is the dynamic between family members, and is comprised of family stories, traditions and non-financial arrangements.
- The Wisdom Element is your client's life experiences and lessons that they hope to pass on.
- The Professional Element consists of the unique qualities of your client's livelihood, the contacts they’ve made, and what they’ve accomplished professionally. If they have a family business, the professional element includes planning what will happen to the business after they’ve stopped working.
- The Societal Element is giving back to society; your client's philanthropy and gifts of time, talent, and capital to a community larger than their family.
- The Financial Element, finally, is what is thought of as “traditional” estate planning and addresses liquid assets, investments, real estate, and so on.
A better approach is comprehensive and holistic and includes all the relevant players.
Legacy Planning should include:
- Wealth generators
- Wealth inheritors
- Support team and trusted advisors
With a more holistic approach, you can remedy the causes before their legacy is affected. Have you seen a client situation like this before? Share your story.