Family connection, not money, has the greatest influence on multi-generational family continuity.
But when many think about legacy, it’s often in the context of multi-generational financial wealth. Money, though, masks what people are really interested in passing to future generations of their family. Instead of being the primary focus, financial assets should be viewed as an enabler to the bigger objective: HAPPINESS.
Isn’t that what we really want for ourselves and for our family?
But happiness is pretty intangible, and it’s very challenging to manage. Happiness is no commodity. So rather than focus on happiness when we think about our personal or family legacy, we put most of our attention towards passing along financial assets and hope that, due in part to whatever financial boost we pass to our heirs, it will help them find happiness on their own.
In our personal experiences both working with families and as members of two different families that have each maintained a cohesive family identity through more 275 years collectively, we recognize some commonalities in our own families and have observed others from families that have achieved multi-generational cohesiveness. This is the first in a series of blog post which outlines the core elements we believe are both relevant and critical for those seeking multi-generational continuity.
As stated above, our main assertion is that multi-generational continuity is not a product of money. Rather, it’s a product of family connection. Money, in and of itself, will not bind people together for more than a generation or two. Common identity, shared goals, values, and experiences are what create a durable family connection. Money can support these connections, but the assets themselves will not replace the hard work required to sustain family identity and connection.
Culture — It’s Alive
We strongly believe that the most important factor in maintaining multi-generational connections within your family is a focus on your family culture.
Your family’s culture is a living, breathing entity. It’s made up of shared common values, spiritual beliefs, economic and social norms, affiliations, activities, geography, climate, landscape, and many other factors. These common elements shared among family members creates a sense of belonging, loyalty and pride that builds resilience. Family folklore, traditions and activities socialize the youth and incorporate the adopted, the step-children and the in-laws. Cultures are built, sustained and informed by each family member, your nuclear family, your extended family, the community where you live, and the broader society. And because aspects of your family’s culture will shift over time, it’s important to steward those shifts.
Just like financial investments that caution you that past performance doesn’t guarantee future returns, focusing on your family culture doesn’t guarantee your family will sustain a common identity and connection through generational transitions. But we do know this: families that focus on culture are much more successful at sustaining their connections — and their wealth — over time than families that focus exclusively on their money.
Do The Work Now
This is important work, and it’s actually becoming more important with each passing year. The rate and pace of technology has changed expectations of how we work, communicate and relate to each other. The world feels increasingly smaller as everything from cultural norms to fashion, music, toys and even jokes can be sent anywhere in the world in less than a second. In some ways this shrinking of the world creates more similarity, but in other ways, it creates an expectation and practically requires making constant tweaks as norms shift.
It used to be that family culture was more durable when it was rigid. In the future, however, it is that much more important for families to examine their culture and consider how to make adjustments over time to ensure it remains relevant across all generations.
Family Culture Cycle
Our observations led us to identify the process for identifying, solidifying and maintaining family culture:
- Identification and Clarification
- Organization — Governance
- Revisitation and Affirmation
We call this a cycle to recognize that culture is not static. To remain relevant, cultures must evolve and shift over time, and understanding when these shifts are necessary requires sensitive oversight and regular revisiting of each step.
The first step focuses on identifying and agreeing upon the building blocks of the family culture. The second step is designed to establish a system that supports the values and moral code of the family and identifies specific ways to socialize and reinforce the key elements that inform the family culture. Fortification refers to the specific activities you chose as a family to orient new members, engage and inform members at different points in life, build relationships both among and between the different generations. Finally, the revisitation and affirmation step focuses on stewarding family culture and requires connections across all generations. The family council is responsible for revisiting and affirming the family culture to ensure remains relevant within the family and also for identifying where external counsel is needed.
Each of these steps in the process will be outlined in more detail in the following four posts, providing a comprehensive framework for those who recognize the value in managing and nurturing not just your financial assets but also your human assets.
In the interest of learning and improving on our thinking, we encourage you to share your experiences and challenge or question the framework. Focusing on this process will support those of you who aspire to create a durable family legacy that sustains both your family members and your assets.
Jamie Forbes is a member of the sixth generation in a family with a history steeped in shipping, transportation and communications dating from the 19th Century. He is the Founding Partner of Forbes Legacy Advisors, which specializes in helping families plan for and make generational transitions. Read his bio here.
Kelly Nowlin is a fifth generation family trustee of the Surdna Foundation — a 100 year old family foundation — and is also the Founder and Principal of KDN Philanthropy Consulting, helping family foundations mark milestones, engage the next generation and realize both legacy and impact in their work. Click here for more info on Kelly.
Originally published at www.forbeslegacyadvisors.com on May 31, 2017.