Everybody has favorite stories about family members they tell around the kitchen table, at holiday celebrations, and during other family gatherings. These tales weave together to form a family’s unique history.
Passing along this history to reaffirm values is a powerful way to help younger generations carry on your family’s purpose and define your shared legacy. Advisors at Truist Wealth’s Center for Family Legacy (CFL) believe this is a critical step in the process of transferring wealth.
More than money
In their sessions with families, Truist’s CFL advisors help family members discover shared values. “Then we find the ones that are most important to them and facilitate storytelling around those,” says David Herritt, head of the Center for Family Legacy. This, in turn, informs the creation of a family mission statement, as well as mission statements for other family entities, such as a family foundation or family business. These mission statements are an important part of effective family governance because they connect purpose, values, and action.
These stories bring the family’s values to life and help the entire family understand that their bonds are about more than money. When they understand this, the family becomes more cohesive, and family members get more excited about participating in furthering the family legacy.
The biggest reason that families fail to successfully transfer wealth is not ineffective financial, tax, estate or investment planning. In fact, lack of good communication and trust among family members accounts for 60% of failures, according to research by Roy Williams and Vic Preisser in their book “Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values.”
Carrying on shared values
Herritt recalls a powerful example of storytelling from several years ago regarding one family’s shared values of loyalty, adaptability and responsibility. During a gathering that included six of the grandchildren between 10 and 16 years old, their grandparents talked about how their great-grandparents started the family business just before the Great Depression
“When the Depression hit, the business didn’t have enough money to make payroll,” Herritt says. “The great-grandparents had to go into their own money to be able to pay their employees. To do that, they had to make some personal sacrifices.” One of the sacrifices was the food that they ate around the dinner table.
At this point in the meeting, the family matriarch brought out moldy cheese and stale bread similar to what the great-grandparents ate during that time. “They had each one of the grandchildren eat a piece of the bread and cheese to get a feel for what their great-grandparents went through,” Herritt says.
This was a revelation for the grandchildren. “They’d never seen their grandparents or their parents want for anything,” he says. “They grew up in a life of wealth.” Seeing the grandchildren make the connection between that story and the family’s values, as well as understand what their great-grandparents’ sacrifices meant to their employees, was a powerful moment.
“So even with young kids, you can start to get them to understand what value and purpose mean through these wonderful stories,” Herritt says.
Passing on the family’s history is such an important part of transferring wealth that many multigenerational families create a formal governance structure for it. A family may create a family council or family assembly charged with preserving the family’s history and passing on the family legacy. They also may create agendas for meetings, develop educational content, and create a forum to discuss other family business.
The CFL describes this forum as a place “where the family’s younger set can begin, at an early age and through active involvement, to learn the family’s history, its value system, and the richness of being a member of a multigenerational family of wealth.”
By developing successful, consistent ways to share family history, it’s easier to help younger family members understand that they’re part of something bigger than themselves. And when they’re older, they’ll have a plan in place to pass on the family’s story to their children, extending your family’s legacy another generation.