Regular interaction and a high level of co-operation are essential when aiming to protect the family’s heritage. The sooner members of the next generation come to appreciate what it offers them, the sooner they will want to get involved in managing the heritage-building process – as well as sharing the benefits.
While this step is essential for family continuity, getting the full concentration of a globalized, social media-obsessed generation presents its own problems.
Young people today are habituated to regular travel and study overseas. They enjoy multiple distractions and so planning for the family’s future requires persistent effort to compete for their attention with the development of a highly structured approach that directly addresses their daily needs.
The most successful approach is to start early as many of the best traits tend to be acquired at a young age – including a focus on general moral principles, an appreciation of long term saving & investment and respect for the wisdom of older family members.
Telling the story of family success
In order to create a significant impact, each family needs its own distinctive story: a credible history that will help to make members of the next generation proud of their ancestors. Such a narrative should cover the family DNA, its Values & Vision and provide a valuable source of inspiration.
The focus needs to be on building a unique heritage. At first, this may appear complex and ill-defined, however when investigated more closely, there will almost certainly be a strong narrative thread that can become the core of the family journey – addressing recent generations and how they arrived at today’s successful destination.
An experienced Family Office can help with analyzing the past, developing the story and establishing how the family heritage can be transmitted to the next generation.
Fun ways to learn about family history
Once the key tenets of heritage have been identified and agreed upon, it is important to share them with more youthful family members and it makes sense to leverage the power of educational tools to maximize this opportunity.
Families can take advantage of formal learning techniques to educate their offsprings in line with the family DNA, Values and Vision and mentoring can take place all age groups – ranging from kindergarten games to graduate student competitions. An informal approach is best for younger kids, finally, with written materials shared during Q&A sessions. For teenagers and above, creative thinking opportunities can lead to the development of practical ideas that are applied directly to the family’s future planning process.
Educational trusts for family success
Family heritage can also be built through legal structures. With the high cost of education, in particular, many families set up tax-effective Educational Trusts for their offspring. Disbursements are allocated to beneficiaries according to carefully established terms and are subject to compliance with the grantor’s intent for each Trust. It is a logical approach, therefore, to link an Educational Trust with the study of milestones relating to a family’s heritage.
Each Trust can be closely tied to a family vision and can direct a conversation about how two parties can help each other: on one hand, funds are made available for education of an individual, while on the other hand, a contribution is expected towards future continuation of family values by sustaining the family ethos into the future.
Since a Trust may stretch from an early age right up to post-graduate level and beyond, with lessons planned over a number of years to increase involvement and maximize the chance of a positive outcome. These lessons can target the acquisition of detailed family knowledge and list specific achievements that must be attained. Successful completion can open the door to further educational opportunities that match an individual’s career aspirations while maintaining close family links.
A Trust can also require older participants to get involved in overseeing the family wealth – compiling lists of current assets, sharing the information with other family members and playing a part in asset allocation and management as a precursor to a potential full-time adult role in the future. To encourage greater involvement, participants can be given the opportunity to select organizations to benefit from family wealth allocation. This approach allows for the adoption of new ideas including social enterprises, charitable foundations and CSR-based initiatives which can be closely matched to each individual’s areas of interest.
Continuity for family success
Handled effectively, this educational process can build (and build on) a family’s heritage and help to develop the desired level of continuity. However, care is required to win over members of the next generation and convince them to subscribe to a shared vision. Each individual must be persuaded to see the potential within the family and understand how they can contribute to wealth management in order to achieve their own ambitions.
This process can help the next generation to fully appreciate the resources of the family, while receiving mentoring and support towards their own personal development. By developing suitable skills, they will be more capable of and committed to creating positive changes within the family enterprise.