Estate lawyers in Kansas City and beyond have witnessed the demise of family wealth again and again.
It’s unfortunate that, according the Wall Street Journal, when an affluent family passes wealth to the second generation, that generation will lose 70% of it. By the end of the third generation, 90% of it is gone. This has set up a cycle in the US where one generation works incredibly hard to accrue wealth; they then pass it along to the next generation who don’t quite understand what it took to earn their fortune, and therefore squander the vast majority of it, leaving only a fraction to their own descendants. By the following generation, it’s back to the drawing board.
Working with a Kansas City estate lawyer is an important step in protecting family wealth, but there appears to be more to it than simply setting up the right shelters or trusts. It turns out that planning and investing are all well and good, but if there is a lack of communication or if heirs are not properly prepared to manage their inheritance, the wealth simply won’t last.
Develop and Share Your Family’s Story
Every family has its own unique history, values, and path to the present. These come together to create your family’s story. For some reason, though, the family story isn’t always fully developed and articulated to all its members. It’s likely up to that first generation to really build that story and to infuse it with ideas about where the family has been, how it’s gotten where it is, and what the vision is for the future. Along with these aspirations, plans for how to make them happen should also be drawn out.
With this family story developed, it’s time to share it. When all of the family members (especially those who will be heirs) have a good understanding of the work involved to get them where they are, as well as what needs to happen to keep the family on track, they’re much less likely to squander it. The story should be augmented with life lessons regarding the family’s values so they can be internalized and supported by each generation. An inheritance is going to be better cared for when those receiving it have a strong sense of both personal and familial responsibility.
Make It Your Family’s Reality
Discussing the family’s story and values might seem like it has little to do with estate and asset protection planning in Kansas, but it’s all part of the bigger picture. Collect the thoughts and wisdom of the family leader and make the story something tangible…maybe a book that everyone can share or have copies of. Additionally, family-building events and activities are beneficial in continuing to strengthen bonds and get everyone on the same page.
Some people call this book or collection of stories, documents, etc. a “Heritage Statement.” The idea is that the family can use these experiences and the documentation to grow closer and to exercise the right restraint, work ethic, and personal responsibility required to make the wealth last for generations to come. The Heritage Statement should also be shared with tax lawyers, financial advisors, and others involved in the long-term planning of the family and its wealth.
For assistance dealing with an estate, we invite you to contact Barber Financial Group’s estate planning lawyers, and request an appointment below.
Written by Garrett Griffin, BFG Legal Services
Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.