Why 90% of Families Fail to Establish a Lasting Legacy

The Four frequently asked questions about Family Wealth:

• Typically, how is money lost within a family dynamic?

  The simple answer is because families fail to implement the Four Fundamentals of Family Prosperity! Reviewing the history of the biggest family financial failures provides an excellent insight into how easily the money can be lost which can be summarised by the following list:

   

  • Poor investment decisions
  • Divorce
  • Nepotism and not utilising meritocracy within the family business.
  • Distrust within the family due to poor communication which leads to emotional conflicts.
  • Addictive behaviour
  • No collective family vision for the long-term wealth
  • Litigation
  • Victims of fraud due to the lack of financial education for those that inherit the wealth. The biggest example was Bernard Madoff who cost investors $18 billion!
  • Poor professional advice from unaccountable advisors
  • Not reading and learning from my book!

   

  “It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times more wit to keep it.”
  Nathan Rothschild

• Is having a will and a world class trust structure sufficient to retain wealth in perpetuity?

  Unfortunately, this is one of the myths that surrounds wealthy families. Firstly, history has proved to us that nobody is too big to fail. In 2008 Lehman Brothers filed for what is still the biggest bankruptcy in history with more than $691 billion in asset value! Nevertheless, many wealth families continue to bury the heads in the sand and avoid the real issues that threaten their long-term wealth.

   

  Although a will and world class trust structures are highly valuable, they will not on their own protect your family wealth legacy. In fact, wills can be amended by family members after the donor has died! The greatest mistake families make is to avoid discussing the terms of their will and the family trust structure as well as failing to introduce the Trustees to the beneficiaries! It is during your lifetime and not after your death, where you need to put in place what is required to protect your family’s wealth legacy. This must include regular conversations with your family about the assets, businesses and investments held by the family and to empower the relevant family members to manage these assets.

• Why is having a vision essential for wealthy families?

  A vision is a guide to the future and must inspire each family member to work collectively. Not having a vision leaves the family’s wealth legacy to chance which is never a good strategy. If the future is unclear, then how can you expect your family to work together towards a collective purpose?

• How does the Charles Group help families establish effective communication?

  One of our core service offerings is The Family Day and enables to start the process of effective communication within your family. As independent professionals we help to facilitate and mediate a day whereby the family comes together as a unit to discuss everything that is important to protect, preserve and grow the family’s wealth legacy. Similar to Board Meetings within a corporation we will assist the family to meet regularly and begin to establish good family governance. We help to create a safe, confidential environment that enables and encourages all family members to air their thoughts and feelings which increases trust within the family and subsequently reduces the chances of emotional conflict and litigation. We utilise several methods to help create a better understanding within the family which includes undertaking and sharing detailed personality profile tests and the excellent values elicitation exercise.

   

  To find out more simply press the button below to book your complimentary call with one of our expert advisors.