My friend Bill Hough spent his working years in a family firm of architects founded in the 19th century by his grandfather. He and his wife, Nancy, both had wonderful voices, so Bill’s choice of architecture over music hadn’t been easy. His compromise was to pursue a supplemental professional music career as an avocation.
Recently Bill requested time to address his fellow business owners and senior professionals who attend our monthly luncheon group. When the chairman announced that Bill’s subject would be “wealth preservation,” I could see his listeners’ eyes glazing over. We anticipated something about taxes, insurance, accounting techniques or security systems. For an old friend, we might endure another dose of that medicine, but not eagerly.
But to our surprise, Bill announced, “This is about preserving our intangible wealth.” He pressed the “start” button on a compact disc player that nobody had noticed, and we found ourselves listening to a recording of songs sung by Nancy.
We all knew that Nancy was terminally ill, with little time remaining. Bill described for us the mechanics of gathering Nancy’s tapes and producing an organized high-quality disc that would be part of Nancy’s legacy to him and their children and grandchildren.
We grasped his point immediately, most of us with a guilty start: We need to organize and preserve our important intangible family assets.
The episode reminded me of the continuing struggle in most families to get people to pay attention to any aspect of wealth preservation. Everyone believes in wealth preservation in theory, but few of us want to deal with the details. Accountants, attorneys and insurance specialists who help us with tangible-assets preservation despair at the difficulty of holding their clients’ attention. The result, somewhere down the road, often is an unhappy family feud over wealth because the details were just too boring to deal with.
Here’s a possible solution. Let’s adopt Bill Hough’s view that our wealth to be preserved includes more than mundane items like property and investments. It also covers things everyone likes to deal with: memories, abilities, our history, hobbies, interests, philanthropies, friendships and experiences.
Everyone in a family, whether or not they are active in the business, can play some role in this effort if they wish. Most families have a few people with a well-established hobby like photography or genealogy or a deep devotion to a family tradition (summer reunions or support for a church or school). There will be other ideas borrowed from the in-law families and modified by us.
I’ve suggested this approach to several client families. The idea seems to appeal to adults and adolescents alike. They’ve found that generating ideas and screening priorities are relatively easy; so is screening the potential volunteer candidates. The family instinctively knows who are the “can do and will do” folks and which ones will do better paired with someone with needed strengths. The budgets for most items are minimal.
An annual family meeting on wealth preservation, using this broader definition, can appeal to both the left-brain and right-brain family members. The mix blends fun, creativity and love in large amounts. The necessary serious discussions about those boring but vital tangible assets can share the agenda or be handled in small side sessions by a coalition of the willing.
The challenging larger projects—like producing a family or company history, or a series of oral histories, or a videotape of special occasions, or that CD of Nancy Hough’s favorite songs—usually are beyond the family’s capacity. These will be larger-budget items, best handled by specialists, with advice from a family committee.
What sort of specialists? Local historical societies may well be interested in your company’s old records and photos. Those folks can advise you—often at no charge—about niggling questions like the pros and cons of framing pictures, or binding them, or going digital. And they can help direct you to professionals capable of producing an end product that will satisfy your company’s psychic needs as well as posterity’s.
Philanthropy is a similar “fun” family activity. Years ago I listened with interest to the philanthropist Alfred Carpenter at the dedication of Harvard’s new Carpenter Center, a gift from him and his late wife. “Making money is a lot of fun,” he told the audience. “Having money isn’t much fun at all. And giving it away is the biggest fun you’ll have.”
But your younger-generation relatives likely won’t experience that fun until they’re past 40. And if your business is well established, they won’t enjoy making the money as much as their elders did. The security and comfort of having money may be reassuring to them, but the details of having money are no fun. That’s why it’s so hard to get them to focus on it.
When we expand the definition of our wealth the way Bill Hough did, we catch everyone’s attention. This kind of conversation provides opportunities and roles that may not be available in the family business. It leads to discussions of other things: other hopes, business dreams, philanthropic dreams.
You’ll never get most of the family interested in the tax code or captive insurance arrangements or generation-skipping trusts, even at gunpoint. As Mary Poppins put it: “Just a spoonful of sugar makes the medicine go down.”
Try it. And let me know how it turns out.
James E. Barrett (jebcmc99@aol.com) heads the family business practice of Cresheim Inc. in Philadelphia.