Watching an Avis Car Rental television commercial, I heard these words that got my attention: “Don’t wish, Don’t hope, Don’t dream…PLAN!” Ironically, that message also applies perfectly to my initiative to work with families to plan a lasting legacy.
I recently teamed up with my colleague Tom Rogerson to present Family Legacy Planning workshops in Detroit and Houston. In researching and preparing to teach these workshops, I always become the student, learning even more in this vast landscape of helping families build a legacy.
My research focused on the massive wealth transfer that is coming. As members of two aging populations—the “Greatest Generation” and “Baby Boomers”—die over the next couple of decades, it’s projected that $84 trillion will pass down to the next generation. Statistics show that, by and large, this largesse is passing into unprepared hands.
For the first 35 years of my career, my primary focus was to help clients avoid paying the 40% estate tax. Indeed, the opportunities to do so are so effective that many dub the estate tax a “voluntary tax” paid only by those who volunteered to not plan around it. As I said in last week’s post, my poster child for this proposition has often been the Sam Walton family, founder of Walmart and Sam’s Club. If one of the world’s richest families can avoid estate tax, then so can a family of any size of wealth.
In all candor, The Blum Firm has become so good at helping families avoid estate tax that our planning has effectively almost doubled the sizes of inheritance. That’s a good thing as long as the inheritance is put to good use. But, I had some wake-up calls as all too often I witnessed inheritances tearing apart families. So, over the last decade, I have expanded my focus to helping strengthen families and prepare heirs for the inheritance coming their way, what I often call “head & heart” estate planning.
That focus was the driving force behind the Detroit and Houston workshops I taught with Tom Rogerson. I started by reflecting on how estate planning has evolved since I graduated from UT Law School 45 years ago. In illustrating that “It’s Not Your Daddy’s Estate Planning Anymore,” I stressed that estate planning is more than having a Will. Modern estate planning also includes:
- Planning for incapacity
- Protecting assets from creditors/divorce
- Minimize tax (income tax and estate tax)
- Business succession planning
- Prenup planning
- Special needs trusts
- Charitable planning
- Living Trust to preserve privacy and avoid probate
- Ancillary documents (Powers of Attorney, Healthcare Proxy, Living Will, HIPAA Waiver, Declaration of Guardian, Beneficiary Designations)
- Elder law
- Red File
After describing how an Estate Plan has expanded, I built on that theme to illustrate how to “Supercharge Your Estate Plan into a Legacy Plan.” Just like an Estate Plan is more than a Will, a Legacy Plan is more than an Estate Plan. Legacy planning is a holistic process aimed at strengthening the family. Aspects of legacy planning include:
- Identifying family values, purpose, and vision
- Building the estate plan around the family purpose instead of around money
- Creating trusts that mentor the beneficiaries to become empowered rather than entitled
- Preparing heirs to be responsible inheritors
- Engaging in family enrichment activities and education
- Opening up communication channels and building trust
- Establishing a family governance structure
- Preserving family heritage and traditions
- Onboarding in-laws and next generations
- Creating a meaningful family legacy to pass from generation to generation
Legacy Planning recognizes that there’s more to family wealth than money.
Tom and I continued the workshop by offering practical solutions to help families build a Legacy Plan, sharing best practices from successful families. In upcoming posts, I’ll share some of those best practices, along with other highlights from our presentations.
I’ll close this post by sharing how gratifying it is to work with families and witness their success. With permission from a long-time valued client, I’ll share this message Jane sent me:
“Thanks to you, Marvin, for helping our family get off on the right track all those twenty plus years ago. I am so proud of our four children and how they are using their inheritance as well as their own resources to ‘do the most good’ in their own communities—with adult grandchildren following closely behind. My deceased husband would be blown away to know how many people, programs, and projects he has helped as we all used his resources to begin this journey. I especially realize how very fortunate we are to have benefitted from your counsel when I observe and hear the sad tales of others, who apparently received no preparation at all. Thank you for helping our family be a success story!”
Jane also shared that her family, now numbering 34 in size, conducts an annual family retreat each June with close to perfect attendance. Jane, this is music to my ears, and gives me the juice to propel me forward in this important work to help families succeed.
Marvin E. Blum
Marvin Blum with Tom and Cathy Rogerson of GenLeg Co., co-presenting workshops in Detroit and Houston on “Supercharging Your Estate Plan into a Legacy Plan.”