Keeping Family and Money Separate

Although money is incredibly important, it is important to make sure it doesn’t define your family structure. If you plan your estate properly, money won’t divide your family unnecessarily. Take a look at this article from someone who is going through the process himself. 

MARVIN BLUM, a lawyer from Fort Worth, flew to New York last week to visit his daughter, son-in-law and young granddaughter. Staying close to his family is crucial to him. The same goes for seeing his son, who lives in Austin.

“I’m at a point in my life where the things I want I can’t buy with money,” said Mr. Blum, 59. “I want relationships and memorable moments.”

As hokey as this might sound, like a sentiment scribbled on a Hallmark card, Mr. Blum takes it seriously. He has worked with his son, 31, and daughter, 28, on the family’s threefold mission: “We value relationships. We value productive work. We value meaning in our life, from spirituality or whatever else can offer you something in terms of meaning.”

In New York, Mr. Blum, who runs a large trusts and estates law practice in four cities in Texas, attended a symposium called “Successful Multigenerational Families,” hosted by Tiger 21, an investment club for people with more than $10 million to invest. The room was packed with dozens of very wealthy men and women, all focused on how to deal with wealth from tens of millions to hundreds of millions of dollars so it would not divide their families.

One Tiger 21 member in the closed-door session asked how to explain to his children that the family flies on a private plane for vacations while their friends fly commercial. This may seem like a high-class problem, but substitute “new Toyota” for private plane and “old Toyota” for commercial and the thrust of the question is the same: Why can we afford something my friends cannot?

(For the curious, James Grubman, a psychologist and founder of FamilyWealth Consulting, said that the question provided an opportunity to discuss how the family makes money, chooses to spend it and rationalizes why it is important, for security or convenience.)

Keeping families together is the goal of every parent, rich or not. And while most people do not have the wealth of Tiger 21 members, they face similarly complicated issues when it comes to planning and talking to their children.

RELYING ON PLANNING Putting together a will is important for someone of modest means, just as creating a detailed estate plan is essential for a wealthier family. The focus is often on the planning and by extension, the tax savings and investment choices.

James H. Lowell, 2nd, a principal at Lowell Blake & Associates, which works with 100 families with up to $25 million to $30 million in wealth, said that too many families fixate on taxes and planning, to the detriment of future generations. Mr. Lowell, who was not at the Tiger 21 event, has been an adviser to the Bancroft family, which once owned Dow Jones & Company.

“People make it more complicated,” he said. “I’ve seen 120-page trusts that are unintelligible to me and can be challenged by anyone. There is not enough emphasis on, ‘you’ve got to make it on your own.’ “

Mr. Blum said he had seen clients wait too long to give their children anything. “I think it’s important to build into a plan a way to prefund your children’s inheritance so they don’t have to wait until you die to inherit,” he said. “I think it’s wrong for a child to wait until their 60s to inherit. By that point they don’t need it.” 

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