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Creating a Lasting Legacy

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When estate planners talk about creating and leaving a lasting legacy, they usually are referring to investment strategies and legal structures. These strategies and structures recognize the wishes of the wealth creator, protect assets from creditors and lawsuits, and encourage future family philanthropy. Successful wealth creators often want to create and leave a lasting legacy; they would like to be remembered for their success. Often they have strong opinions about what inheritors should think, believe, and do with their lives. Planning documents and wealth preservation strategies generally reflect these opinions and the values of the wealth creators, not necessarily those of the wealth inheritors.

Do these legal and investment activities, in fact, lead to a lasting legacy? The statistics aren’t encouraging. Studies indicate that an extremely high percentage of family wealth is dissipated by the end of three generations. From my perspective, the reality that most legacy plans exclusively reflect the thinking of the wealth creators works against their vision for a lasting legacy.

What’s missing? Many planners focus on philanthropy as a means for sustaining families. Philanthropy can be a catalyst for discussions on family values, family history, and the vision that family leaders have for the future. Done thoughtfully, philanthropic efforts can create a rallying point and become a source of pride for a well-intentioned family. But there are other reasons people donate. Many donate primarily for tax purposes. Others want the recognition that often comes with large donations. I’ve even heard of people who donate so that they can be invited to the “best parties” that are frequently associated with charitable fundraising.

One of our collaborators says that we don’t really leave a legacy…we LIVE our legacies. To me, this means that the way we live each day creates a legacy – positive or negative – over our lifetimes. I’ve observed that families that are intentional about living their values – that is, discussing and acting upon their visions and ideas about what their best lives can and should be – these families develop leadership character and culture among family members. The ability to nurture and grow strong family leadership and a positive, sustainable family culture is, in my opinion, what’s missing in estate planning today. Wealth creators would be better-served if, in addition to great strategies and structures, they could develop a process for the ongoing development and contributions of current and future family members. 

The Secrets of Happy Families

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In the late 1990’s, one of our co-collaborators Lee Brower read a statistic published by the Family Firm Institute, a Boston non-profit that focuses exclusively on family-owned businesses; over 90% of family wealth is lost by the end of the third generation. Even today, this dramatic loss of family wealth continues to occur, despite the best efforts of the best attorneys, accountants, wealth managers, insurance and financial planning professionals. Lee, his firm Empowered Wealth, and many others, including The Certior Group, have wondered why this happens and, more importantly, what can be done to counter or prevent this from occurring.

Many ideas have resonated with us and informed our evolving thinking on this matter. If you’ve ever engaged in multi-generational estate planning, you know that there are numerous sophisticated planning techniques and structures available to families. Aside from the unique advantages of certain Wyoming-only strategies such as private single family trust companies, we’ve chosen not to focus on legal structures but rather on facilitating a flexible planning process that encourages inter-disciplinary collaboration among advisors, including skillful, experienced attorneys.

Much of our practical thinking is now focused on how to build and maintain a healthy family culture as an essential, often overlooked element in sustaining family wealth. To this end, New York Times columnist Bruce Feiler published a book in 2013 titled “The Secrets of Happy Families“. In it, he lays out the theory and the research that supports the notion that families that know their histories – their family narratives – are happier, more resilient, and more cohesive. 

One way that we help families capture and organize their family narratives is by employing an Empowered Wealth tool and exercise called the TimeMap. As Bruce Feiler might suggest, this exercise identifies key people, events, milestones, learning experiences, and most importantly, the stories that in the aggregate form the essence of family narratives. Our experience aligns with Feiler’s: that is, most families are not intentional about telling their stories. However, once they realize the importance and value of capturing and making those stories part of the family’s traditions, those families that know their narratives have a better chance of defying the statistics and sustaining their families’ wealth.

Getting Out of Our Comfort Zone Using Experiential Learning

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The Certior Group recently co-sponsored a skiing/learning event under the auspices of the Jackson Institute – a collaboration with Activ8 and Empowered Wealth.

Much of the event focused on the concept of our “comfort zone” and getting out of that comfort zone into the “learning zone”. The basic idea is that we don’t learn when we “play it safe”. We learn “experientially” when we are uncomfortable; when we must deal with and overcome our fears and anxieties.

Experiential learning was most obvious during the second afternoon of the event when the skiing conditions were the most challenging.

A few of the participants reported moments of effortless skiing; perhaps even a “flow state”. Steven Kotler, author and researcher on flow states, suggests that a 4% differential between a challenge and one’s skill level (i.e., 4% out of one’s comfort zone) is the sweet spot for learning and getting into a flow state. 1    The insight here is that achieving and sustaining “flow states” is the key to high performance in skiing, sports, business, and life.

In the end, all participants regardless of skill level said that they enjoyed the skiing. By supporting others to become the best that they can be, we also created numerous shared experiences. Upon reflection, I suspect that for most of the participants the event wasn’t primarily about the skiing but rather the personal connections made and the many lessons learned.

1) Frequently Asked Questions on Flow, www.stevenkotler.com

Lessons from El Capitan

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“If you’re free soloing it’s about perfect execution…or certain death” – Jimmy Chin

On Sunday evening, Jackson Hole resident Jimmy Chin, along with his wife filmmaker Chai Vasarhelyi, won an Academy Award for co-directing the film “Free Solo”. The movie features climber Alex Honnold and Honnold’s dramatic, unprecedented free solo climb of El Capitan in Yosemite National Park.

In this interview with Vanity Fair, Chin and Vasarhelyi describe what sets Alex Honnold apart from most people, even if he weren’t a uniquely talented climber.

Here’s an excerpt from the interview:

Chai: Alex lives every day of his life with intention. He’s doing exactly what he wants to do with his life.

Jimmy: But there’s also this misperception…people think “Oh, he’s a free soloist. He has a death wish”…that’s not who he is.

Chai: If he was a daredevil or a maverick, we wouldn’t have been interested in making the film. It was actually his process, his discipline…It was kind of a perfect storm for a documentary film…real existential issues lay in the dangers involved….in his courage he was connecting with people.

Ironically, although the movie focuses on Alex Honnold it also says a great deal about Jimmy, Chai, and their team. What Jimmy and Chai said about Alex Honnold also applies to themselves and their team. It took great discipline and a unique process for everyone involved in the project in order to create the gripping drama that audiences experience. “Free Solo” is more than a film about an extraordinary athlete accomplishing an astonishing fete. In fact, this movie is the story of two extraordinary human feats: Alex Honnold’s free solo of El Capitan and Jimmy Chin’s team filming it. Chin led a highly-skilled crew that filmed the accomplishment, shooting video and photos from positions on El Capitan that few – other than world-class climbers – could even reach, let alone film or photograph from. The experience that he, his wife, and their team produced is a testimonial to what can be achieved with collaboration, a sound process, and great execution.

Most of us can’t aspire to free solo El Capitan or win an Oscar. But we can aspire to live life intentionally, with courage to face obstacles we encounter, and with discipline, collaboration, and a well-conceived, well-executed process.

How Might We Make Wise, Responsible, and Fair Philanthropic Contributions?

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In several ways, Jackson is one of the philanthropy “capitals” of America, if not the world. Jackson is the home of dozens of nonprofits, both large and small, focused on numerous worthy causes. Every week it seems, there are fundraisers and other events calling our attention to challenges and issues in the world.

Most of us want to help to make the world a better place both now and in the future. But herein lies a dilemma: with the sheer number of nonprofits, the diversity of causes, and the volume of requests for contributions, how do we act in a generous yet thoughtful and authentic way? How might we contribute wisely, responsibly, and fairly?

Without attempting to answer these questions comprehensively, here are a few thoughts:

1. We owe it to ourselves to identify and articulate our deeply-held beliefs and worldviews.

If we haven’t thought deeply about why we do what we do or why we want what we want, deciding on a course of action can be confusing and a bit overwhelming. This can be especially true when it comes to philanthropy and charitable giving. Discovering our motives, how to give, and why becomes an important precursor to fulfillment and meaning through philanthropy.  123  

There’s a paradox in asking “why” we do things, however. In our experience, people get stuck trying to answer “why” questions. If you’ve ever dealt with a child’s endless asking “why”, you know what we mean. “Research has shown that we simply do not have access to many of the unconscious thoughts, feelings, and motives we’re searching for…we tend to invent answers that feel true but are often wrong.” 4  Instead, we’ve found and research verifies that asking “what” leads to greater self-discovery and self-awareness.  5  

2. Inevitably, we must learn to say “no” kindly and with gratitude.

Sometimes it’s not easy to say “no” to nice people with a worthy cause. Yet, if we are truly to live our lives deliberately and intentionally, we must be discerning in our contribution choices. At the same time, gratitude – expressing respect, appreciation, and generosity of spirit for others and what matters to them – remains foundational in all of our endeavors.

3. With an over-abundance of choices, it might make sense to foster collaboration among competing interests.

Our experience has been that seeming cooperation among competing interests has often masked a quiet, unspoken competition for dominance and control. We can passively accept this reality or we can learn new ways of coexisting, collaborating, and thriving. Much of our work is dedicated to teaching and learning better ways to collaborate.

1) Wealthy People Give to Charity for Different Reasons Than the Rest of Us, Daisy Grewal, Scientific American, July 25, 2017.

2) 5 reasons why people give their money away – plus 1 why they don’t, Sara Konrath, and Femida Handy, The Conversation, November 26, 2107.

3) How to Get Donations? 14 Reasons Why People Donate, Network for Good, Best Practices, October 6, 2015.

4) What Self-Awareness Really Is (and How to Cultivate It), Tasha Eurich, Harvard Business Review, January 4, 2018.

5) Ibid.

The CERTIOR Group, LLC

The Certior Group, LLC.

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