Double Dog Dare: Have a Family Wealth Meeting!

Once upon a time, a friend called me to say he was planning to gather his family around the kitchen table and announce his plans to start a foundation with $5 million.  I asked him if he and his wife had previously made any significant wealth transfers to his mature, adult children, who were all doing well.  He said, "No." 

"Well," I said, "let me make a prediction about how your announcement will go over and then suggest a different way to start this important conversation."  Then I play-acted the children melodramatically protesting Dad's decision to give away their inheritance.  After we had a good laugh, we discussed some ways that the children could be real advocates - not adversaries - of a family wealth plan.

What are some of the best practices being conducted by families participating in family wealth meetings?  One foundational practice is to have a very broad and inclusive definition of the term capital.  Usually we associate capital exclusively with financial capital.  But over the last few decades, many books and articles have been written about other kinds of essential capital including:

  • Human capital (Individual family member's knowledge, talents, spirituality, values, passions, dreams and aspirations - who you are called to be and what you are called to do.)
  • Intellectual capital (How individuals learn over a lifetime and how families communicate, resolve a conflict, make joint decisions, and mentor one another.)
  • Social capital (Individual's connections with their communities; their civic engagement - how you care about others beyond your family.)

We began this article with a story about a father who had created the family's wealth.  By embracing the best practices that other successful families used in their wealth planning, he was able to gradually progress from good to great through three levels of exploratory questions:

  1. What do I want to do with MY wealth?
  2. What do I want to do with the FAMILY'S wealth?
  3. What does the FAMILY want to do with THEIR wealth?

What the father was able to realize is that his ability to create significant capital was interdependent on the other types of crucial capital possessed by the other members of his family.  Each family member had direct and indirect influence on the amount of wealth that had been accumulated. 

How does a family discover the impact that their individual capital contributions have?  One time-tested way is to craft an agenda for family meetings that include opportunities to tell emotionally-laden family stories about the human, intellectual and social capital within the family and to ask pin-drop, stop-and-think questions that foster true understanding and appreciation of those capital contributions. 

Here's to hoping you will take our double dog dare to have the courage to have your own family wealth meeting!

By: Dan Rice, Co-founder of CTAC

Back to the June 2011 eNewsletter.