Relational health key component of ‘wealth’ transfer

I gathered with a group of legacy planners from around the country early this year.  The conversation was robust, and they articulated many common themes.  One theme came up again and again: Relational health in a family is of first importance if they are to succeed across generations.

Often, though, relational health gets placed behind the transfer of financial wealth.  When it comes to passing down wealth, families immediately think of professionals such as lawyers, CPAs or CFPs. The vast majority of money spent on wealth transfer goes to build the financial structures of an estate plan, with little spent on improving a family’s relational health.

Skilled financial planning is valuable, but the group agreed that a family’s wealth lies in a whole range of less tangible capital: spiritual, social, intellectual and emotional capital.

If a family did a good job of passing on these other types of wealth, then the financial capital could just be a bonus. Instead, families treat financial wealth as essential, with the others optional.

Your most valuable capital? 

If a family could only pass down one thing to the next generations, what would rank at the top of the list? For me with my family, spiritual capital takes the top spot.

It comes down to what we most want for the next generations. Is the financial piece really the most important? And if not, why do we spend so much time and money focused on the transfer of financial capital?

Perhaps it’s because we have come to expect family dysfunction as the norm. We don’t expect families to work well as a team. We lack a vision for a family united around a common mission or common values, with thriving individuals contributing to the family’s success. But it’s an attainable vision, and it’s well worth the investment of time, effort and money to get there.

Family wealth consists of much more than finances, and investing in relational health is key to a family’s long-term success. It’s in the context of healthy relationships that the spiritual and other intangible forms of capital can be transferred.