unPrepared: How Much will it Cost?
At Pratt Legacy Advisors, we have the unique and profound opportunity to participate in Legacy Planning for our clients. We are able to help families do a tremendous job preparing for wealth transfer and have seen families transformed through the healing process of positive legacy planning. However, we are also able to see the consequences of families that do not prepare for the transference of wealth. In this post, we will share two stories that will demonstrate the power of Legacy Planning and hope that it gives you a small taste of some of the elements covered within the book “unPrepared” (all names and details have been removed to protect the privacy of the families).
A Sobering Story: “Planning AT Your Family”
During my career as a legacy advisor, on one particular instance, I was invited to participate in a conference in Atlanta GA. This conference was unique, in that it was for women who have been blessed with significant wealth. They were meeting to share resources, share stories, and provide helpful guidance on how to navigate the sometimes troubled waters of managing their wealth.
One woman shared her story with me and I found my heart breaking while the words rolled from her lips, words of pain, frustration, and exhaustion. Her father passed away in his early 80’s and when the family attorney called the family in for the initial estate meeting, he dropped a bombshell and named her the trustee of a trust she had never once in her life heard of. The trust was created by her father during his life, in secret, was never shared with the family, and had somewhere close to $10 million dollars that this sweet woman was now responsible to manage. The will went further on to make her responsible for managing the dispensing of family assets in a non-equitable manner, where she had to carry the wishes of her father out, knowing that she was the “favored daughter.” Not only did she never ask for this burden, her father never prepared her to deal with the profound financial challenges in managing this kind of wealth.
Almost overnight, she was put in a position to put her personal life on hold to manage the transference of her family wealth, manage a charitable trust that she did not know existed, and navigate the strained relationships in emotional anger of a divided family. She simply was not prepared for such a burden and it almost ruined her life. She worked through the financial, family, and relationship issues over the course of a few years, but she came to resent the way her father left such a divisive burden for his family. She shared with me that “there must be a better way.”
A Healing Story: “Planning WITH Your Family”
Contrasting the the Sobering Story above, a Pratt Legacy client (who also happened to be a friend to the Pratt family), had a mother with a decent amount of wealth who had significant tax exposure (about 50%) upon her passing. She was in her 80’s and wanted to do some planning with her family, even though she did not know where to start. We started at the very first, and most important place – we sat down and talked.
We invited the children, their spouses, and everyone who was close family to this 80 yr old widow desirous of keeping her wealth in the family, not having it depleted through taxes. We started with her first and listened to her priorities, her values, and how she would want to honor her late husband. Together, the family created a Charitable Trust, a Family Trust, and a few other targeted giving tools that were able to transfer some of the family wealth to causes that were important to the matriarch. She ended up living to a wise age of 92, a full 12 years after we started with the single conversation.
Through the years between the initial planning and her passing, the family felt a profound sense of peace and purpose. They knew that their needs would be met, and in a tremendous act of charity, determined to direct the Charitable Trust completely to two organizations the family strongly supported – Children’s Hospital of Seattle and the Fred Hutchinson Cancer Research Center. Not only did they dedicate significant funds directly to two honorable organizations that she felt strongly about, they were able to do so while she still was alive and to honor both her and her late husband. The daughters of the venerable matriarch were able to share “this is the right thing to honor Dad.”
Pratt Legacy Advisors now has the honor of helping the next generation with their Legacy Plan, all due to the courage of one, simple family conversation.
If we can help with your Legacy Planning, please contact us and we are happy to share this story, plus many more. Staying quiet is often a poor plan for Legacy Planning, as evidence from the top story. However, blessings and preparation can be yours, simply by taking the initiative and planning WITH your family.
“When the family gets unstuck, the family WILL flourish. This book project was one of the small ways I can give back to ensure the next generation and generations to come will thrive in the future and continue to build a lasting legacy.” Alan Pratt
The book can be found at the Center for Family Conversations.
To learn more about Legacy Planning and preparing your family to successfully manage their futures, contact Pratt Legacy Advisors to set up an appointment.