“This is a process that slowly builds up to being able to say ‘yes, this is what we are about.”
I am a big believer in periodic meetings that bring together the different generations within a family to talk about their big picture — the family legacy, the purpose of wealth, how to make the best use of family assets, including the different skills and abilities of everyone in the room.
Among other things, family meetings can allow the younger generations to ask questions, discuss and debate so as to better understand what is being handed down to them and how to use that to enhance their lives and those of others.
But before planning for a family meeting, often long before, we work on developing a family mission statement (FMS). This is something that is usually created by the generation that controls the wealth (usually our clients) and is foundational.
The FMS does three things: memorializes the family’s background, defines their values and goals, and plans for future generations. And it also often helps us see how well (or not) the family wealth and estate plans align with life goals and aspirations.
I work with client families on mission statements typically years in advance of the first family meeting, and the starter document usually evolves. It can (and should be) fine-tuned using input from future family meetings and as the younger generations age and assume more responsibility. Importantly, it sets a precedent for family members to think about wealth intentionally and in line with values and beliefs: “Here’s why we set up this trust or this foundation; it goes back to these value(s)…”
Most of the work on a family mission statement involves helping our clients define what for them is most important in life, what they value and what they want to continue into future generations. This is not something that can be rushed. Sometimes the answers come easily, but a lot of the time this is a process that slowly builds up to being able to say “yes, this is what we are about.” After that, it’s not difficult to put together a mission statement.
Key Elements of a Family Mission Statement
I find that the most effective family mission statements are short — one to two pages – and usually include the following:
Short Intro: Purpose of document and intent to make a clear statement of values
Sections and topics:
- Brief family history
- Traits and values of ancestors you most admire
- What wealth has afforded your family
- Beliefs you have about what makes a life well-lived
- Whether you believe you have responsibility beyond the family because of your wealth
- How wealth can empower future generations’ values and sense of self
- Wealth transfer goals and how they support family values and legacy
Once created, the family mission statement can serve as a guide for the first structured family meeting. At that first meeting, we may not be talking finances at all. It could be more about the family history and legacy, how that shaped the leading generation, what elements are being memorialized and passed on. There is great data that points to children being more confident, happier, having higher self-esteem and being emotionally healthy when they know their family history [see this Q&A with Dr. Duke].
Well-planned family meetings can create a strong foundation for multigenerational wealth that is potentially as important as the investment management and estate planning we do for our clients. In future blog posts, I will be writing more about how families with significant wealth can make the most of their financial and human capital, including through the concept of Wealth 3.0.
