Working with families on their legacy is more than just conversations around estate, endowments, bequests, donations to charities and taxes. It is about continuing on what was created in previous generations. This is where succession planning differs from continuity planning.
A Succession Plan is an output of continuity planning. It includes both the emotional and technical solutions around wealth transfers. Continuity planning is the journey or process that leads to the successful transition of wealth between family members, owners and operators, friends, community and we cannot forget, government.
This year Canadian Thanksgiving and the Jewish High Holy Days are back-to-back; Rosh Hashana, the Jewish New Year, is a time for celebration and reflection on the year that past and what lays ahead. There are 10 days between Rosh Hashana and Yom Kippur, the Day of Atonement, when we are hopefully written in the Book of Life for another year. This year, Thanksgiving falls smack in the middle adding another layer of self-reflection and connection with family and friends.
For me, this time of year is always a challenge. I always find myself entering into a major metamorphosis starting early September and ending sometime around late November. Perhaps it is the change of season, or perhaps it is culturally ingrained.
This year is no exception. I have been reflecting a lot on wealth, happiness and what success looks like; for me personally, and for my company, as well as for my clients. Below are some thoughts in the context of my work as a philanthropy advisor and facilitator of legacy and succession plans within families.
Over the past few weeks a couple clients have asked me about how and when to share their family wealth and social capital plans with their children and other family members. This of course is different for each person and each family so there is no hard and fast rule. There is however some general things that all wealth creators should consider when planning for the transition to the next generation or out into community:
1. How much is enough? As Warren Buffet said, "I want to leave enough for my kids so that they will do something, but not so much that they won't do anything." Allison Maher from Family Wealth Coach calls it Knowing Your Number. What do you need to live on and your inheritors to live on to be comfortable, what do you want government to take in taxes and what do you want your community to receive."
A couple of Sundays ago, I took my two older girls (ages 8 and 11) to a community volunteering event (J-Serve), at our local Jewish Centre. As a mother of 3, I believe that getting my kids involved in community events is important for a number of reasons. As they grow and develop, being involved in a larger community teaches them about social responsibility. As a parent, I want them to learn not to focus only on themselves but rather to learn that there is a whole world around them. I want my daughters to learn to be giving, considerate and compassionate towards others. Volunteering is important for character building in children. They learn to care for other people and learn that selfless actions feel good.
Several weeks ago I presented to Calgary's JCI chapter. My presentation was about failure. I started with a TEDx Video where Tom Wujec presents on how building a marshmellow tower leads to team building and creative problem solving.
How do you discuss philanthropy and charity in your family? Growing up in mine the act of charity was never really discussed. It was done, but I think there were some opportunities lost in having an open dialogue with my parents around how they donate their money. Don't get me wrong, my family is very generous with their time and their financial resources, it was just never discussed.