“To change ourselves effectively, we first had to change our perceptions.” Stephen R. Covey

Good morning & Happy Monday

Well, it’s evident we into December…..a wonderful time of year surrounded by holiday music and holiday parties.

As we wake up this morning, we are reminded that it also seems to be a time of sustained uncertainty and volatility in the markets….times that tend to strip away what’s extraneous and return our focus to what matters most. For many of us, that means family and health — not just the physical health of individual family members, but the emotional health of the family as a unit and our own relationship with money, finances and wealth.

“When it seems like the sky is about to collapse, relax, that’s just the roof caving in.” --- and it’s an opportunity because we needed a new roof Jarod Kintz

One thing that’s proven to undermine our relationship with capital, wealth and the health of that family unit is a lack of planning where finances are concerned. If we are able to step back and change our viewpoint, we can understand that the current uncertainty surrounding us provides a unique opportunity to thoughtfully engage ourselves and our families on the topic of planning and goal setting, and in the process, extending and strengthening your relationships with your wealth and your family.

For better or worse, the coronavirus pandemic has all of us more focused on our families than ever before. That makes it a great time to reinforce family wealth planning, particularly generational wealth planning.

Today, we have the ability to look beyond assets and tailor a family wealth plan based on the needs of the individual members and the family as a whole. More importantly, we can focus on bridging the communication gap between today’s very distinct generations. As I’ve mentioned previously, study after study finds that more than half of wealth transfers fail, not because of the quality of estate planning advice or structures in place, but due to inadequate preparation of the family and issues of trust and communication.

“Life is 10 percent what you make it and 90 percent how you take it.” ---- and communicate it Irving Berlin

Have a look at the chart below…..recent data from Capital Group’s February 2020 Investor Generational Wealth Transfer Study shows there remains a disconnect between the generations in terms of lessons given and learned between the generations.

The ability to bring younger generations into the financial fold can deepen the families connections, enhance family communication and improve the entire family system’s relationship with wealth. If we are focused on how we perceive wealth and how that translates across generations, we can ensure we are on the path of intergenerational wealth creation and preservation/ “...

What happens is of little significance compared with the stories we tell ourselves about what happens. Events matter little, only stories of events affect us.” Rabih Alameddine, The Hakawati

So how do we bridge the generation gap?

Have a family wealth briefing

If transparency is the goal, gathering everyone together for regular family meetings or “wealth briefings” can be a great way to share with the broader group. these Family Meetings are a perfect platform to discuss the goals for the wealth, the long-term plan, and how wealth is managed. A family meeting also provides an opportunity for you to educate multiple generations on financial literacy and financial fitness, to share investment philosophy and to help create and echo the family’s core values.

Develop family governance

Guardrails As a family’s net worth increases, there may be a greater need to develop certain ground rules for the wealth, it’s control and management. We call this family governance. The concept has long been used in family business planning, where it is crucial to have procedures and processes in place. However, families do not have to be in business together to benefit from a governance model. It offers a way to organize communication between family members, encourage problem-solving as a larger group and support each other in decision-making.

While how a family thinks about governance may vary, these five big-picture considerations are a constant among families:

• Control – Who’s in charge? Clarify everyone’s role, so it’s known who is making financial and planning decisions and who has authority.
• Process – How are decisions made and communicated? Outline exactly what to expect so there are few surprises.
• Education – Are younger generations educated about wealth, and does everyone have appropriate guidance on family finances and financial planning?
• Planning – How are we prepared for future tax and estate issues?
• Transition – Do we have everything in place to pass the reins to the next generation and beyond?

“Everywhere is walking distance if you have the time.” Steven Wright

Remember, planning takes patience, intension and time but if we are able to start from a strong foundation we can build a stead plan for generations to follow. As we head into ANY new year, the road ahead us uncertain. If we are able to ensure we are looking at the road ahead from the most advantageous vantage point and the most constructive perspective for us….and our family, we can ensure that the future ahead is a bright one.

“Look at everything as though you are seeing it either for the first or last time, then your time on earth will be filled with glory.” Betty Smith, A Tree Grows in Brooklyn

Be well & enjoy the moments

Derek