As pointed out last week, we’re in the “year of the wedding.” Our focus last week was on the risks weddings pose on protecting a family’s human capital. Human capital is one of the five key components of a family’s wealth (along with intellectual, social, spiritual, and financial capital). Human capital consists of the individuals who make up a family, celebrating each one’s personal identity, self-worth, and well-being. Marriage adds a new member to the family, so it instantly impacts the make-up of a family’s human capital. If you engage in a thoughtful process to welcome in-laws, their impact on the family’s human capital can be positive. But if you’re not careful, bringing a new in-law into the family can be disruptive to the family’s human capital.
Put yourself in the shoes of the new son-in-law or daughter-in-law. Most of us have been there at some point. Remember how it feels. There’s no getting around the fact that in-laws grew up in a different home, with a different set of rules, and on some level, different values. It’s natural for the new in-law to feel like an outsider. When the family makes efforts to welcome the new member and make them feel like a valued member of the team, you improve the odds of successfully incorporating that in-law into the family. Taking steps to strengthen the bond with in-laws pays enormous dividends, especially when you consider that they will be parenting the next generation of your family. The continued success of your family’s human capital depends on it.
When I started out as an estate planning lawyer over 40 years ago, the trend was toward secrecy and a more closed relationship between the older generation (Generation 1 or G-1) and younger generations (G-2 and G-3). This was especially true when it came to money and a family’s business affairs. This was even MORE especially true between G-1 and SPOUSES of G-2. The world is a different place today. No matter how hard one may try, there is little to no privacy. We need to embrace the reality that G-2 and G-3 (and their spouses) have ways to find out much of G-1’s business. What’s also true is what they don’t know, they’ll make up. Such behavior fuels misinformation and a communication breakdown. Rather than hide from today’s expanded access to information, the smarter course is to accept it and adopt an open approach that carefully manages the communication flow.
Along with the new reality of more “open” rather than “closed” relationships, there is also a new style of estate planning. The “new age” of estate planning is holistic. It goes way beyond just drafting Wills. The Blum Firm has expanded our offerings to help families establish a family governance structure. Such a structure contains policies to foster strong family bonds, particularly with new in-laws. In particular, your family governance system will oversee a family meeting process that includes these elements:
- Adopting an orientation process for in-laws and for kids reaching adulthood (multi-step, not through a firehose, so as not to overwhelm)
- Gradually educating family members on the family’s business, estate planning, and wealth (all five capitals, not just financial)
- Regularly reaffirming the family mission statement, values, and vision, allowing for new input and periodic updating
- Creating an avenue for continually updating the family on new developments and important decisions
- Establishing open channels of communication, feedback, and idea sharing
- Procedures for group decision making, voting, and resolving conflicts
- Planning shared experiences (which includes having fun together!) to build relationships
Granting in-laws a backstage pass to the inner workings of the family will go a long way in making them an insider instead of an outsider. Rather than have them learn through haphazard methods, guesswork, and “pillow-talk” with a spouse, create a thoughtful structure. The Blum Firm would be honored to help you create a system to manage the communication flow. One final tip: This is family, not business, so we know you’ll deliver it with love.
Marvin E. Blum
Weddings are a time of great celebration, including welcoming a new member into the family. This was the night we celebrated Adam bringing Brooke into the Blum family.