The Legacy Series
I believe good legacies are left on purpose, while poor legacies are left because they lack purpose. There are a number of important things in life that are easy to say, but hard to do. Leaving a legacy is one of those things. In this three-part series, I’ll share some thoughts and exercises that will ensure that your legacy has a positive influence on the next generation or two. The multiplied effect will result in a much better life for your family, and maybe even a better world.
Part III: Crème de la Crème (If You Can Pull It Off)
Your most important legacy is your family's values. You can use family legacy meetings to communicate them.
Family legacy meetings are a way to get all of your family members involved in charitable giving decisions. Feel free to set up the process and parameters any way you like. The main idea is that family members should work together to identify, evaluate, and select the charities to which they will donate.
Not only is this a great way to support charities you care about, it’s also a priceless opportunity to educate children and young adults. Families that implement these meetings appreciate them as a time to bond, teach, and pass on the family’s values.
You can set the parameters for your family legacy meetings in a way that is best for you, but they need to answer the following questions:
- What is going to be given and who will contribute?
- Which family members will be included in the decision-making process?
- How often and when will the meetings occur?
- How will charity recipients be chosen?
Here is an example of how it works:
After 40 years of hard work, growing and building a successful flooring business, Robert and Marsha decided to sell it.
Robert and Marsha’s children worked for the business during their formative years, which gave their parents an opportunity to teach the value of hard work and the importance of treating customers well.
Once the business was sold, they wouldn’t have the opportunity to connect with and teach their grandchildren in the same way. So, they scheduled family legacy meetings. These meetings were a perfect way to continue passing family values to their children and start the process with their grandkids.
Robert and Marsha established the following guidelines:
- $100,000 is deposited (by Marsha and Robert) into the charitable giving fund every year.
- Meetings take place once a year as do distributions from the fund.
- Each child and grandchild submits a candidate charity with a written paragraph or two describing why he or she thinks donations should be directed to their particular charity.
- The charity must be a 501(c)(3) organization and distribute more than 70% of its funds directly to the cause.
- All submissions are given to all participants one month prior to the annual meeting.
- At the meeting, each member explains their choice and answers questions from others.
- Family members who can’t attend in person join through FaceTime or Skype.
- Each member votes for the charity they like the best, but they can’t vote for their own submission.
- Each charity with a vote will receive funds commensurate to the number of votes.
- Grandma & Grandpa have ultimate veto power on any gifting.
After just one meeting, Marsha told me, “This really got the kids thinking about what it’s like to be in someone else’s shoes. Besides helping the grandkids appreciate what they have, it’s teaching them valuable writing, negotiating, and critical thinking skills.”
As an added bonus, when the couple talked about family legacy meetings with friends, they started a trend. Two other couples in the neighborhood started having legacy meetings with their families.
Too often, we concern ourselves with meeting our family’s financial needs and forget the importance of making sure our children have a solid understanding of our values and beliefs. Think about exactly what you would like your legacy to include and then take the steps necessary to build it. Consider beginning your first family legacy meeting with the creation of a family values statement. This is a written statement that describes what your family stands for and the purpose behind your actions.
Jack Davis is the founder and CEO of Navigation Retirement Group, an independent wealth management firm serving high achieving retirees and pre-retirees with investable assets between one and ten million dollars. For nearly three decades, he has been using his asset management and financial planning skills to develop and implement planning strategies that help pursue his clients’ unique goals. Passionate about education, he holds a Masters in Personal Finance and the CERTIFIED FINANCIAL PLANNER™ credential. He is also the author of Cash Out! Retire on Your Terms, Live Well and Die Happy, a book that gives pre-retirees and retirees planning tools and insights that can help them flourish throughout retirement. Based in Oro Valley, he and his team serve clients throughout the greater Tucson area and around the country. Learn more by connecting with Jack on LinkedIn.
Securities and advisory services offered through Navigation Retirement Group, a Registered Investment Advisor.
Navigation Retirement Group is a registered investment advisor. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein.
Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing piece to make decisions. The information contained herein is intended for information only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. Please contact your financial advisor with questions about your specific needs and circumstances. There are no investment strategies, including diversification, that guarantee a profit or protect against loss. Past performance doesn’t guarantee future results. Equity investing involves market risk, including possible loss of principal. All data quoted in this piece is for informational purposes only, and author does not warrant the accuracy, completeness, timeliness, or any other characteristic of the data. All data are driven from publicly available information and has not been independently verified by the author.