About eight years ago, Jim Grubman and I started recording and studying the lifestyle and culture choices of first-generation wealth creators.
Most grew up in working-class families where interdependence was just a fact of life. They had to work together every day just to keep the house and family functioning.
If someone from the family created wealth, they often used it to help their children to be more independent. Their kids would each have their own bedroom and bathroom. They didn’t have to mow the lawn. They went to summer camp, spending even less time with their siblings during the summer. They had their own car at sixteen, negating the need to share the family car(s) with their siblings. They would go away to different cities for private school, college, and graduate school, spending even more time away from one another.
These decisions were made out of love and generosity, but there was a cost. The parents unwittingly created a family culture with little compromise and shared decision-making. They ended up denying their own children the vital interdependence that they had to learn with their own siblings. Having to negotiate who gets the bathroom first in the morning, who mows the lawn, and who gets the car on Friday night was in the long run healthy for families. High net worth families didn’t have to make these compromises. Their wealth bought freedom, which became separation.
One of the many downstream effects of this trend is troubles with legacy planning. For kids who grew up with wealth, a first group decision is also increasingly their last: how to sell everything the parents built and divide the money evenly. Where is the family legacy in that?
Many conversations about legacy today revolve around how to pass along the values that will help the next generation not merely be happy but live lives of purpose, to use their blessings and freedom well. Without the right values, freedom can be as much a curse as a blessing. But this important conversation often begins very late and can easily lean toward utilitarian “box-checking.” People say what others want to hear then return to their independent lives.
There is another way. It began with an idea from Malcolm Gladwell that didn’t sit right with me at the time. In one of his books, he downplayed the importance of shared values in making group decisions. As a legacy planner, I found this ridiculous. So, I caught up with him at an event and asked him about it, and I’ll paraphrase his response here.
Think about how and when you met your best friends from college. Did you become friends primarily because of shared values? Or was it because you shared meaningful experiences with them? You were in the same dorm, or class, or team. Didn’t you learn their values over time, those you agree with and those you differ with? Sure, there may be a few foundational ones, but don’t you have some friends that have very different values than yours?
I was floored. He was right. I’m from Boston, yet one of my best friends is a Yankees fan! Talk about different values. But I’d die for him.
Wise governance is the largest single factor in successfully preserving family legacy and purpose. And governance begins with relationships that are built and deepened through meaningful experiences.
We adjusted our legacy planning guidance to focus on helping wealth creators to organize meaningful experiences with their children so they could get to know each other once again and build trust. Shared values are important, but the only way to even begin talking about values is to begin without the pressure of governance decisions hanging over them.
Wise governance is the largest single factor in successfully preserving family legacy and purpose. And governance begins with relationships that are built and deepened through meaningful experiences. At GenLegCo, we’ve helped over 300 families establish and deepen connections that form a basis for consequential decision-making, and we’re constantly improving our model.
Sharing philanthropic decision-making can help build these relationships. And collaborating with a principled partner like the Bradley Impact Fund can help healthy relationships translate into healthy family governance and succession plans. Start today to build the trust that will make shared asset management and philanthropy part of your legacy.
