The New York Times article by Scott James (Losing a Fortune Often Comes Down to One Thing: Family, Feb. 9, 2017) tells the story of the Stroh family's loss of their estate. The article points to the breakdown of trust and the resultant communication breakdown, the lack of competence and standards for the qualification and performance of heirs, and the lack of any purpose/mission to guide family members long term. What's occurring today in many wealthy families mirrors the findings of decades of research by Roy Williams (below chart).
Most estate plans focus on transferring assets and yet no one talks about the impact this has on the heirs.
How does a family identify the core issues that will destroy the family long term?
How do they repair trust that is based on betrayal that exists within the family?
How does the family address the next generation’s mood of entitlement? Heirs often grow up in a lifestyle of ultra-high net worth without any conversation regarding the wealth or their roles in regard to this wealth.
How do heirs begin to learn about the responsibilities that may fall on them in the future and prepare for it?
One of the saddest stories we have heard about the unsuccessful transfer of family wealth involved a root issue of disengagement and the belief that the wealth was a burden. A law firm’s senior partner shared with us the story of a young man whose father was very successful in real estate. His father died unexpectedly and at age thirty-five, without any preparation, the son received his father’s sizable estate. The estate amounted to $110 million, plus the equivalent of a city square block of commercial real estate.
Three years later, at age thirty-eight, the son committed suicide. The note he
left was a sad commentary. He had lost the “I can hardly wait” aspect of life. In the note, he said that most people have times when they could hardly wait for a
weekend to do something. He could do anything he wanted whenever he wanted;
there was nothing to wait for. He had no wife and no children. He had access to women, friends, travel, cars—anything he wanted—yet he did not know if the
friends were friends because of who he was or because he was rich. He had no
purpose, felt alone, and thought he had nothing worth living for.
When does a family begin to prepare the heirs to address the issues they will need to address? Mark Twain declared, “The two most important days of anyone’s life is the day they are born and the day they find out why.” How does a parent or grandparent help their heirs know "the why" they were born?
The Williams Group Process works to begin an awakening on how to build trust and communication skills, and these skills are used to develop and identify the values the family holds together. These values are then used to develop the purpose/mission of the family. This composite is also used to identify the roles that will be required to go into the future with observable, measurable standards that all heirs, spouses, and family members can use to fulfill their interests and passions. They can then become better stewards and determine their “why.”