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Values – You’re Family’s DNA

What’s more important to your children: Your values, or your valuables?

Don’t get us wrong, legacy-minded families spend a lot of time focused on passing along their valuables. But in our opinion, the most valuable asset a family has is its values. Why?

Every decision we make is based on our unique value system.
Values dictate our priorities.

Our values are our DNA

For example, consider the following questions:

  • Should I leave my children equal amounts, or what’s fair? Is there a difference? Let’s face it, our children have different aptitudes for different things, different goals, passions, and ambitions. If your children have drastically different income-producing opportunities in life, would you leave each of them the exact same amount, in exactly the same manner? Why or why not? What values drive this decision?
  • How much should I leave to my children? Recognize that leaving them too little might force them to make career or other life decisions that they would otherwise make differently. Recognize that leaving them too much might encourage them to make career or other life decisions that they would otherwise make differently. What do your values tell you about how much is too little, how much is too much?
  • What are acceptable uses of your children’s inheritance? If you’re an entrepreneur, building or buying a business might be an acceptable use. For some families, entrepreneurship is too risky. What do your values suggest?
  • How much do I leave to philanthropic organizations? Which philanthropic organizations do I include as part of my legacy? This is perhaps the clearest indication of how critical a family’s values are in defining their legacy. Do your values suggest an emphasis on art and culture, food, shelter or health care, education, young or elderly, or animals? Why?
  • How do I want the family to govern itself after my generation departs? Keep in mind that families, while similar to businesses in many respects, differ in one key aspect: a family member can’t simply be fired from the family. And while family governance might be relatively simple with the second generation, as each successive generation assumes leadership, the family becomes broader, more diverse, and exponentially more challenging to govern. What do your values tell you about the importance of family unity, collaboration, consensus, participation and communication? Why?

These are just a few of the key decisions legacy families must make. And while each family will make them differently, every legacy-minded family will make them with an acute understanding of the family’s values.

Acquiring an acute understanding of your family’s values can only come from a formal values assessment

The tricky thing about values is this: while we all know that they drive our decisions and shape our priorities, few of us can actually identify and describe all of them clearly. For example, did you know that there are three different types of values?

  • Vision Values provide our source of inspiration and reflect how we would like the world to be. They are most influential when we are comfortable with our current situation.
  • Focus Values reflect how we currently view the world, and drive most of our day to day decisions. They range from “the world is a scary place and therefore I prioritize security and safety”, to “the world is a fragile eco-system that requires my effort and contribution, often through risk-taking endeavors”.
  • Foundation Values are the values we fall back on during periods of stress and anxiety. They can motivate us to make decisions and prioritize things in a way that we wouldn’t otherwise do, if we weren’t under stress or experiencing anxiety. Understanding these values is critical to avoiding poor decisions.

Explicitly understanding your values allows you to make better decisions and achieve success.

Explicitly understanding your values allows us to provide highly relevant and valuable advice.

If you’re interested in learning about how successful families utilize their values when creating and nurturing their legacy, we encourage you to review the following sections:

  • Human and Intellectual Wealth –Family legacies are often described in terms of a family’s material wealth, but they are established, nurtured, and sustained solely by their human and intellectual wealth. Legacies cannot be guaranteed or mandated because the obstacles to creating a lasting legacy abound. But there is one obstacle that rises above the rest in terms of its ability to separate the 1 out of 10 family from the other 9: The transition of Human and Intellectual wealth from one generation to the next.
  • Purposeful Estate Planning – The estate planning process as we know it fails almost every family that engages in it. Why? Because the process is almost entirely focused on minimizing the tax burden during a generational transition, the least important aspect of a family’s legacy. Purposeful estate planning supplants this inferior aspect with a focus on expressing the family’s values, and facilitates an effective transition of human and intellectual capital from one generation to the next.
  • Philanthropic Planning – Philanthropic planning has a clear benefit for the community. But legacy-minded families also realize that philanthropic planning is one of the best tools a family can use to perpetuate both human and intellectual wealth within its own family. In most cases, when philanthropic planning is used to benefit both the family and the community, the benefit to both is even greater than it would be if the family was doing it purely for the benefit of the community. There is indeed a selfish side to philanthropy.

If you want to learn more about the importance of values-based planning, find yourself asking any of the above questions, or have your own questions and would like answers, we encourage you to contact us only to answer your questions, not to sell you our services.

If you’re not ready to contact us but would like to learn more about the importance of values-based planning, we encourage you to review the following resources:

Books

  • The Legacy Family by Lee Hausner and Douglas Freeman
  • Beating the Midas Curse by Perry Cochell and Rodney Zeeb with William Eck
  • Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values by Roy Williams and Vic Preisser
  • Understanding Philanthropy: It’s Meaning and Mission by Robert Payton
  • Philanthrocapitalism: How the Rich Can Save the World by Matthew Bishop

Websites

  • www.valuementors.com – Promotes the identification and conscious awareness of values, in organizations and in families.