When a poor man dies in a family people mourn for what is lost. When a rich man dies in a family people rejoice over what is left. This alertness to what is left behind after the death of a rich man is the reason why people fight in wealthy families. They fight because no one among the people left behind earned the wealth. The man who worked hard to earn his wealth is dead. When he was alive, no one could complain about how he uses, share or distributes his wealth. Earning wealth cancels the motivation for others to complain.
But when this man dies everyone else becomes a beneficiary of wealth. Rather than earn their own wealth they benefit from a dead man’s wealth. When wealth is given to a group of people as benefit issues like fairness, right of share and transparency becomes critical. It is at this point that family fights begin to ensue. Whether this fight will happen in your family depends on what you choose to do now. Without a concrete after death plan, they will be fights over wealth when you die. These fights can severe family relationships and sacrifice family ties for money ties. To prevent these fights from happening, family leaders must put the right plans in place.
When I ask family leaders whether they think their children will fight over wealth. I usually get a resounding No response. Some of these no responses are affirmative in nature others are defensive. When I get an affirmative no response it is usually because a family leader thinks that the current peace in their family will remain intact for many generations. Current peace is not a guarantee for future peace. Besides the current peace that exists in most families today is hollow peace. Hollow peace is false peace. When false peace exists in a family, it is because children bury their pain and resentment out of respect for their parents. They endure rivalry and remain silent for fear of rocking the boat.
This kind of peace will shatter after the death of a parent. Research shows that nine out of ten families fail to keep wealth and family together for more than two consecutive generations. This means that the children of your wealthy friends will end up in court a few years from now. If there is no fight prevention plan in place, wealth will dissipate. In the cases where I get a defensive No response from a family leader, it is usually because a family leader already see signs of potential fights.
Rather than confront the fight, he chooses to leave them for his children to handle. Even in families where there is genuine peace, fight over wealth will come from external sources. Random family members will come out of the wood works to lay claims to wealth. Friends will do strange things. Creditors will harass your family and your once vibrant business will fight for its life. There is no question whether they will be fights over wealth and there are three reasons for this.
First, every family has that one child that fit the description of a problem child. This child will start the fight. Parents call this child the problem child because they think he is the problem of the family. But smart professional call him the “symptom bearer” because he is the one that embodies hidden problems in the family. A problem child is never the problem he only reflects the problem that exist in a family. Problem children are created when there is a presence or absence, abundance or lack of an essential item in the family. Parents also create problem children by having and keeping favorite children. When parents choose a favorite child, other children know they are not the favorite.
This creates deep resentment that causes endless sibling rivalry after death. Second, family leaders must understand that their small nuclear family will expand beyond its bloodline. As a small nuclear family with one leader at the helm of affairs, it is very easy to maintain peace and unity. At certain points, families will welcome new family members through marriages. These new member can disrupt family unity. If these new members are not carefully chosen their entrance into a family increases the likelihood of conflict.
Third, family leaders need to review their Trust and Estate plan. Most Trust and Estate document do not consider unity in their planning process. The way most of them are structured naturally fuels conflict. If asset are passed on to the next generation without consideration for peace, fight will ensue. If the basis for the distribution of wealth to the next generation is not transparent, clear and fair children in a family will fight over wealth. Making sure your trust and estate plan foster peace and not disunity requires a second look at its legal provisions.
So what can family leader do to prevent war from happening in their families?
Family leaders must do three things. First they must resolve the problem of the problem child. If you have a problem child in your family, you need help to get to the root and cause of the problem. Through series of expert facilitated conversations you can get the help you need. Second, family leaders need to set up a new member induction and onboarding process for incoming prospective in-laws. This helps a family ingrain certain important family values and beliefs and verify alignment of a new family member. Third, a Family leader must get a second opinion review of their Trust and Estate plans. This will help them verify and confirm that their wealth transfer document supports generational family unity.
Maintaining order and peace in a family today is different from maintaining order and peace in a family for many generations. When your descendants grow to as high as one hundred people, you need more than just a last wish advice to stay united to keep them united. Without an organized system and plan to prevent family fights, family unity will disintegrate and wealth will end. Now is the time to plan.
The family that succeeds in preserving wealth also succeeds in keeping the family together.
Updated Bio-Please Update my Bio with the information below.
Grace Agada is a Generational Wealth Advisor, Legacy Expert and Author of the popular Solid Wealth Book. She is a Consultant and Coach to an exclusive list of top executives and entrepreneurial clients running Businesses from $1-million to $1 billion in size. She help Affluent clients prepare and execute a Ten Generation Wealth Legacy, Diagnostic Family meetings, Family Business Succession, Family Bank Systems, Sudden death contingency plans, Next generation grooming, and second opinion review of existing Trust and Estate Plans to support generational wealth goals
Column Title: Please Change the Column Title from “Create Solid Wealth” to “Make Wealth Last” as this is the focus of my column for This Day.