Heritage Planning Pt. 4: Creating a Family Story and Legacy

As I have touched upon in my previous columns for AdvisorOne, helping another person to identify the stories, values, life lessons and experiences that make them unique is the starting point for all successful heritage planning. That occurs through an interview process called Guided Discovery. Many topics are covered during the Discovery discussions that can have an impact on how a person or family thinks about and relates to itself. Your clients can arrive at a new level of clarity about those they love and the causes they believe in. Because of this, they can begin to implement new structures for preserving this unique identity in the future. 

After a person’s treasure chest of memories and life lessons has been opened through Guided Discovery, these gems need to be shared. The first form of this sharing is expressed through a document that we like to call a Heritage Statement. A Heritage Statement is a meaningful and compelling declaration of a person’s story and values, coupled with their vision for sharing these values with future generations. 

A Heritage Statement is unlike the other traditional planning documents a family has already produced. It is not something that was created in secrecy and then hidden away in a vault awaiting an author’s death, a surprise to be sprung on survivors. It is a living, breathing chronicle, something that is a profound and lasting document, carefully crafted to be just as relevant 100 years from now as it is today. The Heritage Statement should express who the client is at the deepest levels, what they believe, and where they have come from; and it must clearly communicate a vision that will inspire, encourage, and positively challenge their family. 

A Heritage Statement can comprised many pieces. Each document needs to be constructed in the voice and with the personality of the people who are building it: It is a personal document. That said, there are certain components and topics that typically receive coverage to at least some degree in a Heritage Statement. 

Why the client is writing the Heritage Statement.  When a person is handed a document that says “The John and Jane Smith Family Heritage Statement” at the top, they might be wondering exactly what the heck this is. It’s important to begin with an opening statement that speaks to prospective readers (i.e. family, friends, advisors, etc.) and explains what the document is: how we got here, this is what we believe, this is what is most important to us, this is what we hope to see in the future. 

The client’s story.  This section of the Heritage Statement probably seems the most self-explanatory. Parents (or grandparents) should keep in mind that children have not necessarily heard the story of how they met and fell in love, for instance, or the most difficult challenge they have faced. Areas like childhood, young adulthood and parenthood should be covered, to ensure that the family’s history is recorded. It is important

to note, though, that the document must not only relate the story of the client, but do so in a meaningful manner. The material included needs to be presented in a manner that is authentic and accessible. 

The client’s core values.  The most significant values—the principles that have guided your client through times both thick and thin—should be listed, along with examples of why and when those values mattered most. 

Introduction of guidelines for effective Family Governance. The ultimate goal of Family Governance is to create a high-performance, multi-generational team in which the succeeding generations are participating in decision making, leadership activities and hands-on money management long before their parents pass on.

The successful family governance process focuses on teaching the family to communicate and work together effectively. It also mentors the children through real-world experiences under the guidance of other family members and advisors—which equips them to succeed. 

The governance process is not just a science, but an art as well. This is an important distinction, because if there is any arena in which families do not want a transactional relationship, family governance is it. 

My peers and I believe that families must address the family governance issue via a flexible, tested and proven process (whether The Heritage Process™ or another process) because there is no ‘one-size-fits-all’ family governance structure solution.  Pre-packaged structures should not
be imposed upon the family in lieu of a process that allows the family to discover what matters most to them. 

Families we work with often introduce family governance through the incorporation of a Family Charter and Family Council in their Heritage Statement. 

The Family Charter.  Is used by families that would like to organize around a set of goals that help keep everyone—young and old—on the same page.  A Family Charter is a statement of intention. 

The Family Council.  Families that decide they want to enact a Family Charter often also include a section in their Heritage Statement that explains what this organizational structure—often called, for example, the Smith Family Council—looks like, and what the roles of the various involved parties will be.  Stipulations about rotating leadership, terms of eligibility and participation, etcetera, are frequently addressed. 

The client’s vision for the future. One final section that typically closes out a Heritage Statement is a declaration of the vision of the person or persons who are writing it.  This is where their ultimate hopes and dreams for their family are laid out.  What final bits of advice might they have for choosing a career, or finding a spouse, building a family, pursuing their aspirations, living faith?  This is the space where those most personal of hopes can be expressed. 

As I said at the beginning of this column, each Heritage Statement is a unique declaration of love and lasting value, and each is as different as the personalities of the people who are creating them. There is no set format, or set list of required items. Perhaps the most important single element of a Heritage Statement is the presence of honesty and respect in everything that is included. 

In my next column I will address how a Heritage Statement provides unity and clarity in combination with a family’s traditional financial and estate planning, and how it begins to install a new form of dialogue and a new mode of interaction for all involved parties—within the family, and among their team of advisors. 

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