Make the Most of the Holidays with a Family Legacy Conversation
According to many studies, 70% of families lose their wealth in two generations; 90% lose their wealth in three. And while the reasons for these dramatic losses vary, open communication and clear planning can go a long way towards helping a family sustain its legacy.
Whether your family will be gathered around a crackling fire or a virtual yule log this year, the holiday season is an ideal time to reflect on what you've all accomplished in 2020 and start looking ahead to a brighter 2021. Sharing your answers to these three questions can help you create a family mission statement that will prepare the next generation to be generous and thoughtful stewards.
1. What are our values?
The myriad challenges of 2020 forced all of us to reassess what's truly important. You may have realized that you weren't allocating enough time for your passions. Events might have opened your eyes to problems in your communities you hadn't noticed before. Perhaps your family is exploring new philanthropic opportunities, rethinking college study plans, or even contemplating career changes.
In a conversation between generations of family members, some of these topics can get a little touchy. It's important to remember that your family doesn't have to agree on every issue that's discussed. Instead of trying to convince each other, focus your mission statement on the things that everyone will be excited to work on together.
2. What is our purpose?
It's possible that your values discussion will lead to a long first draft of your mission statement. Settling on a clearly defined purpose will help you narrow down that list. No matter how wealthy or well-intentioned your family is, you can't help every cause. In fact, many retirees let their charitable impulses get the better of them and put a serious dent in their nest eggs.
One good place to start this discussion is to think local. For example, if your purpose is to help in the fight against COVID-19, donating to a national organization like the Red Cross is probably the most effective use of a monetary gift. But you could supplement that donation by organizing a food drive to support the unemployed in your community. That food drive could become an annual event that your family continues to grow and manage in perpetuity.
3. What is our plan?
Speaking of management, the most effective family mission statements have structure. Settling on values and purpose should give you an idea of what you want to accomplish. But what are the steps you can put in place to make a real impact?
Family giving plans come in all shapes and sizes. You might enjoy this values and purpose discussion so much that your family decides to revisit it every holiday season and choose a new charity to support. If your family is anticipating a major generational transition, such as retirement, you might explore more formal ways of establishing your legacy. Many families form their own nonprofit organization or a charitable trust to memorialize their values and purpose in a way that will resonate with future generations.
How you and your family feel about your shared mission can be complicated, especially after such a challenging year. Settling on the best options to realize that mission can be complicated as well, especially if your dream is to start an organization that could become a positive cornerstone of your community. Let us help you sort through those options so that you and your family can stay focused on the vision that's lifting your spirits this holiday season.