Most lay people would probably respond “wills and trusts.” If you ask professionals who specialize in estate planning, you might get answers like “preserve and protect money and assets for future generations” or “minimizing taxes and maximizing the transfer of assets.” Both perspectives are certainly accurate. But this raises the question, “Why do we do estate planning?” In other words, what are we trying to accomplish when we do estate planning?
If we look at the typical professional approach, it boils down to maximizing the money and wealth transferred and assuming that that will best serve the people involved (i.e., the family). For this article, we’ll call this Approach #1. But if you could read people’s minds, I would speculate that what most people really want is for their family to remember and honor them by capturing and leveraging their lifetime of experiences and wisdom to help their family thrive for generations. We’ll call this Approach #2.
The statistics for Approach #1 are not encouraging. As much as 70% of family wealth is lost by the end of the 2nd generation and over 90% by the end of the third. In other words, all of documents, structures, governance, education, etc. that has historically gone into Approach #1 has resulted in a meager success rate. There’s actually a folk saying for this phenomenon – Shirtsleeves to shirtsleeves in three generations.
We believe it makes more sense to “Put People First”; to not let taxes, structures, distributions, etc. drive the estate planning process. We often see that the typical estate planning process “leaves the people behind” because it focuses and prioritizes legal documents, saving taxes, and maximizing asset transfers, etc. Instead, we believe in first building individual, self and social awareness; nurturing emotional intelligence, enhancing communication skills; and setting the conditions for collaboration (Putting the People First). THEN, utilizing the traditional tools and techniques of estate planning to enhance the outcome and serve the people, not the other way around.
Why ultimately do we put people first? In order to optimize multi-generational True Wealth; that is, to help people live happy, fulfilled, meaningful, and joyous lives.