One of the most fundamental human goals is to live a life that won’t be forgotten. From the works of William Shakespeare to modern film like Inception and Coco, humanity has always loved exploring what it means to leave your legacy. For a great many people, the easiest way to create a lasting legacy is through your family. Even the simple act of creating a family unit is a method of preserving your memory, but there can be so much more involved in leaving a concrete, appreciable legacy for yourself through the generations. Insurance company Allianz put out a survey of how Americans are passing their legacies onto younger generations, and formalized four “pillars” of inheritance:
1) Values and Life Lessons
2) Instructions and Final Wishes
3) Personal Possessions of Emotional Value
4) Financial Assets and Real Estate
1) Values and Life Lessons
2) Instructions and Final Wishes
3) Personal Possessions of Emotional Value
4) Financial Assets and Real Estate
From the results of the survey, the baby boomers and their children agreed that the non-financial aspects of inheritance are ten times more important than the financial aspects. The group also agreed that they believe they are having the important conversations about inheritance; however, they actually are not. It's important that both parties know and understand the overall plan and objectives of the legacy to be passed to succeeding generations, therefore having these conversations is imperative.
Your Legacy: A Firm Foundation for your Family Business
Leaving a lasting legacy through these pillars may be a nearly universal human desire and one of the main purposes for starting a family, but it can be a unique challenge for those that run businesses with their family members. When your life, your possessions, your stories, and your assets are all wrapped up within a business, these pillars begin to blend and further muddy the already murky waters of inheritance and legacy building.
One of the biggest considerations in dealing with a business legacy is that the next generation must uniquely respect your values, life lessons, and instructions in order to secure the financial aspect of your inheritance. For example, the matriarch of one family started her own business, and rather than allowing her personal wealth to build, continued to always reinvest into her business. With little-to-no fluid assets to leave to her children, she instead chose to involve them in her company, turning it into a family business a decade after its inception. By working alongside her children, she was able to instill in them her values for running a business, her desires for the future of the business, and a sense of ownership and pride in keeping the business afloat. Rather than leaving her children a rather meager financial inheritance, she instead built her children into her business succession plan, leaving them not only with the keys to a successful business, but also the knowledge and tools to keep it thriving.
This strategy, of course, necessitated thorough communication with her children. With each of them she had a heart-to-heart, explaining that she would do her best to leave an inheritance upon her passing, but that the nature of the business meant she could only promise so much. She spoke with them about their desires and about respecting their autonomy, but also instilling in them the opportunity that would come with joining the business. In the end, both children signed on, in part because the positions they were offered matched their interests. These communications and respectful considerations are as much a part of her lasting legacy as the business she built.
With all these intertwining concerns (and more), it can be hard to know where to begin to build a legacy within your family business. Open communication, frank and thorough discussion, and practical considerations for both familiar inheritance and business succession are needed to make sure that your legacy is left as a strong foundation, not a burdensome mess. For advice on opening up these discussions and more solutions to the problems unique to family businesses, contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
One of the biggest considerations in dealing with a business legacy is that the next generation must uniquely respect your values, life lessons, and instructions in order to secure the financial aspect of your inheritance. For example, the matriarch of one family started her own business, and rather than allowing her personal wealth to build, continued to always reinvest into her business. With little-to-no fluid assets to leave to her children, she instead chose to involve them in her company, turning it into a family business a decade after its inception. By working alongside her children, she was able to instill in them her values for running a business, her desires for the future of the business, and a sense of ownership and pride in keeping the business afloat. Rather than leaving her children a rather meager financial inheritance, she instead built her children into her business succession plan, leaving them not only with the keys to a successful business, but also the knowledge and tools to keep it thriving.
This strategy, of course, necessitated thorough communication with her children. With each of them she had a heart-to-heart, explaining that she would do her best to leave an inheritance upon her passing, but that the nature of the business meant she could only promise so much. She spoke with them about their desires and about respecting their autonomy, but also instilling in them the opportunity that would come with joining the business. In the end, both children signed on, in part because the positions they were offered matched their interests. These communications and respectful considerations are as much a part of her lasting legacy as the business she built.
With all these intertwining concerns (and more), it can be hard to know where to begin to build a legacy within your family business. Open communication, frank and thorough discussion, and practical considerations for both familiar inheritance and business succession are needed to make sure that your legacy is left as a strong foundation, not a burdensome mess. For advice on opening up these discussions and more solutions to the problems unique to family businesses, contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
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