Posts made in September, 2009

Wealth Transfer – Planning for Success

Posted by on September 27, 2009 in Family Wealth, Financial Planning, Readings | 0 comments

Over the next 50 years, 50-100 trillion dollars will be transferred to successive generations. Approximately 80% of all transfers will fail by the 3rd generation.

According to a study in Williams and Preisser’s “Preparing Heirs” only 15% of estate / wealth transition failures were due to the what’s (i.e., legal and technical issues). The remaining 85% were result of the how’s (i.e., breakdowns of communication and trust, lack of family developed missions, and inadequate preparation of heirs). In fact, open communication and beneficiary preparation were the two factors that distinguished the successful 30% from the failed 70%.

Under the traditional estate planning paradigm, the primary considerations are tax minimization, asset protection, and probate avoidance. Estate documents are drafted in such a manner that if the first and the last pages were removed, no one could tell to whom they belong. Trust names most often reflect the tax purpose and the grantor’s surname. Yet none of these speak to the above determinants of success: communication and preparation.

And what about the family’s priceless intangibles: their human and intellectual assets? How are these planned for in traditional estate planning? Simple answer: They’re not.

Fortunately, there are other options.

One such option is the Purposeful TrustTM, created by John A. Warnick and Scott Farnsworth.

The following is from their How to Build a Purposeful Trust Practice brochure.

It Starts with a Purposeful Conversation™

Given an opportunity, most clients are interested in deeper conversations around the impact of their wealth on their children, grandchildren, and favorite causes. They want to discus the “How much is enough?” and “How much is too much?” questions. They want to know how to pass on more than money. They want their wealth to be a blessing to those they love and not a crip­pling handicap.

Purposeful Conversations provide a simple, enjoyable, and gratifying process for helping clients think deeply about the significant issues underlying their most important estate planning deci­sions. From their answers, we can discern the real purposes behind their planning and we can glean the words to express their purposes, hopes, and dreams to trustees and beneficiaries. The clients’ own words and stories are the best source for the name of the trust, for the lessons and wisdom that should inform trust decision, and for the bedrock principles that should guide the trust through uncharted waters. With their words and their stories in hand, we’re prepared to start creating Purposeful Trusts.

The Seven Secrets of Purposeful Trust Planning

We have discovered the seven keys that open the door to a beautiful and meaningful new world of planning for us and our clients.

Secret #1: Focus—The estate planning process is robust and engaging when it focuses primarily on the clients’ deepest hopes, dreams, and purposes.

Secret #2: Purpose—The trust itself is infused with life and energy when the clients’ own words are used to express the rich human purposes of the trust.

Secret # 3: Name—The clients’ name for the trust can be a succinct and powerful expression of their fondest hopes and dreams for the trust and its beneficiaries.

Secret #4: Guidance—Directions based on the clients’ wisdom and life-lessons and written in the clients’ own words can guide the trust to achieve its grandest purposes.

Secret #5: Heirlooms—When a gift of tangible personal property includes the cli­ents’ story and the item’s background, it turns an object into a priceless treasure.

Secret #6: Gratitude—Expressions of appreciation and an attitude of gratitude in givers and receivers can turn transfers into gifts and financial riches into true wealth.

Secret #7: Principles—Statements of the clients’ guiding bedrock principles can provide pole star and compass in navigating the trust through an unpredictable future.

How might you begin to capture The Purpose of your clients’ estate plans?

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Filling from the Fount of a Fire Hydrant

Posted by on September 21, 2009 in Family Wealth, Financial Planning | 0 comments

Last week I learned that approximately 80% of all wealth transfers fail by the 3rd generation. Why? Because financial and estate planning typically start with the method instead of the purpose.

At the Masters Level Intensive on Purposeful PlanningTM, I learned that there is another way. It’s the way I was looking for, but did not know existed, back when I was a financial advisor. It’s an approach that truly lets the money follow the life and not the other way around.

My brain is still marinating in all the information received. It was an awesome and inspiring week. Over the next few weeks, I will be highlighting insights and information from the Intensive, and asking you – are you ready? “The questions are coming.”

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An Attitude of Gratitude

Posted by on September 14, 2009 in Family Wealth, Musings | 0 comments

By the time this posts, I’ll be in Colorado for Purposeful PlanningTM’s Masters Level Intensive Training Program. The recommendation to attend came out of a phone conversation with Courtney Pullen, a well-known and well-respected family wealth counselor. I had contacted Courtney to see how he came to develop this specialty, and to see how I, too, might continue the process of utilizing the skills and experiences of my first career, in wealth management, in my second career as a licensed professional counselor. Courtney recommended the Intensive as the best next step in this process.

His description of the program deeply resonated with my passions for philanthropy, legacy, and authentic living. But since I launched my private practice earlier this year, its training budget is not yet in line with the cost of traveling to and attending such a program.

A firm believer in “it never hurts to ask,” I inquired of Courtney if scholarships were available. He was not sure but knew Barb Culver could answer this question for me.

In a matter of days, I got the glorious news that the four faculty members had come together and offered to sponsor my attendance, so that the majority of my tuition would be covered.

I cannot express how humbling the experience was. To have 4 individuals, who have never met me – and only one which has ever spoken to me – offer such a generous gift so that I could take advantage of such a wonderful and timely opportunity, is amazing. I am filled with gratitude. That is why, in the most public way I know how, I want to offer my most sincere thanks to the Purposeful PlanningTM Faculty:

Barbara A. Culver, CFP, CLU, ChFC, AEP

Terry Hunt, EdD

Courtney Pullen, MA, LPC

John A. Warnick, Esq.

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Hey Lazarus, What About Finances?

Posted by on September 7, 2009 in Financial Therapy | 0 comments

In graduate school (the second time – getting my Masters in Psychology), I was introduced to concept of the BASIC ID — Lazarus’ model for case conceptualization, which assesses behavior, affect, sensation, imagery, cognition, interpersonal relationships, and the use of drugs.

After a review, the professor asked if anyone could identify an area that Lazarus had left out. Well, as a Certified Public Accountant who had only recently learned that affect is not only a verb, I was in information-absorption mode. A few days later, when I had some time to reflect on my professor’s question, I realized that two important areas had indeed been left out. The BASIC ID model did not assess the matter of ones finances or spirituality. The BASIC ID needed to be the BASIC FIDS.

The spiritual aspect I will table for now, as gratefully, our field and many others are gaining a greater appreciation of the role of spirituality in recovery and healing. But what about finances? Money has been called “the last taboo,” and most counselors are more comfortable assessing a client’s sex life than they are their client’s financial situation. As a result, issues such as compulsive shopping, financial infidelity, compensatory spending, etc. are often missed.

One of the reasons some counselors do not assess a client’s financial health is a lack of comfort with financial matters. Another barrier is their comfort in asking such questions of their clients. Is it any of my business? How might the client respond? Do I have a right to inquire of such things? What do I do if I do identify a problem area?

All of these are valid questions, which counselors could benefit from exploring – and they’ll likely be commented on in future posts. But for now – for those wanting to start the process of assessing financial health – as a dimension of overall health – here are three basic inquiries with which you may begin…

How have your finances been impacted by _____ (the presenting problem)? And vice versa?

To what extent is your financial status a source of stress?

How would you describe your relationship with money? (or What role does money play in your life?)

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