Defining Family Values

By Hightower Westchester on July 21, 2015

 Defining Family Values

There are many different ways to define success by parents but regardless of how one defines it the common takeaway is it took hard work to achieve it.  With this hard work come responsibilities and more importantly a history of knowledge and values that we want to instill within our children.  Starting early in the build out of this roadmap is the cornerstone that will help in defining the success of intergenerational planning.

Family dynamic is a delicate topic for most but one that needs to be addressed in order to create a meaningful legacy.  As there are many different approaches on how to plan accordingly, the reality is that every situation we have dealt with is completely different.  Understanding and listening to the family dynamic is critical for a successful customized plan.  Some family members do not want to reveal to their children their financial picture.  Perhaps this is a function of their parents never revealing their overall picture or perhaps parents feel that their children are not mature enough to handle such responsibility.  The truth of the matter is that there are many reasons to not approach this topic and certainly not doing anything is a decision, clearly not the best decision.  Based on our experience, the longer the family waits the harder this subject becomes to address.  It becomes a nightmare when parents get sick or family members get married and the family dynamic changes over night.  Having a framework for family members to follow simplifies and addresses these challenges.

Without proper planning, there is a high probability that assets will be depleted either by taxes or lack of family cohesiveness.  Based on a study by Cerulli, 90% of wealth is destroyed by the 3^rd generation.  The top reasons that this occurs is lack of family governance, improper decision making and dysfunctional family relationships. When our team engages in intergenerational planning we want to make it meaningful on all fronts.  The end goal is to create a Family Mission Statement that every family member understands and has a sense of ownership around. It starts with a dialogue of what are the top 5 meaningful things to each family member and then prioritizing them in order of importance. Purpose tends to be the starting point where we help define a family’s sense of values, purpose and who do they want to be (vision). Then we look at structure, where it should reflect the unique character of the family.  Simply, we are trying to understand each family member’s sense of values.  Philanthropy is a big driver in this process as it helps define what is important to each family member.  Once philanthropy is discussed and agreed upon, it creates a strong structural foundation that tends to align everyone’s moral initiatives. 

These are just some starting points in this long process that help define a Family Mission Statement.  This is a document that we review yearly to make sure all still makes sense for the family.  Our experience is that when we engage with a family that has some of this structure in place, it leads to a better overall family relationship and ultimately a better outcome.  It takes hard work to get to the place of success but it is even harder but more rewarding when this legacy has a sense of purpose.

Roman A. Ciosek,  AIF®  Managing Director  HighTower Advisors 440 Mamaroneck Ave Suite 404 Harrison  NY  10528 (o) 914.825.8633 | 914.825.8630 (c) 914.318.8612 (f) 914.777.1751rciosek@hightoweradvisors.com