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Estate Planning: Your Family, Your Wealth, Your Legacy.

Keeping It In the Family: Family Mission Statement

Building and preserving family wealth isn’t an end in itself. Rather, it’s a tool for promoting shared family values — such as philanthropy, education, financial security, quality of life — or encouraging family members to lead responsible, productive, healthy lives. Drafting a family mission statement can be an effective way to define and communicate these values and is a great place to start leaving a lasting legacy for you family

Mission control

Family mission statement promotes a harmonious estate plan

Typically, much of the estate planning process focuses on money. But the most successful estate plans are founded on relationships.

Building and preserving family wealth isn’t an end in itself. Rather, it’s a tool for promoting shared family values — such as philanthropy, education, financial security, quality of life — or encouraging family members to lead responsible, productive, healthy lives. Drafting a family mission statement can be an effective way to define and communicate these values.

No magic formula

There’s no magic formula for creating a family mission statement. Indeed, every family has different values and beliefs. In many ways, the process is just as important as the end result. To avoid conflict and hurt feelings, it’s critical for you and your family to be on the same page, and communication is the key.

Perhaps you wish to leave your children with more than just money. For example, you may want to pass on a family tradition of charitable giving or community service. Or, like Warren Buffett, you may want to give your kids “enough that they feel they can do anything, but not so much that they feel they can do nothing.” Whatever your objective, simply giving away a significant portion of your estate to charities or community groups may not be enough to get the message across.

To be sure that your children (or grandchildren) don’t feel as if they’ve been “disinherited,” discuss your plans with them and get their insights into the best strategies for achieving your objectives and promoting shared values. Developing a family mission statement can be a great way to open the lines of communication. For the process to be successful, it’s important to include all affected generations.

What the statement should cover

Because each family is different, there’s no cookie-cutter formula for drafting a family mission statement. The most important thing is for the statement to clearly articulate your family’s shared values, whatever they may be.

Ideally, the mission statement will also create mechanisms for intrafamily communication and for putting the statement’s ideas into action. For example, the statement might call for regular family meetings and create a governance structure for managing the family’s wealth and making decisions about charitable giving and other endeavors.

Few families agree on everything. But facilitating communication and decision making in this way minimizes conflicts that can arise when family members don’t know what’s going on or feel that they have no say. To make family meetings more efficient and effective, consider inviting outside advisors to lead or participate in the meetings.

A principled approach

Many people today are moving away from a rules-based approach to estate planning and embracing a principles-based approach. Rather than conditioning a child’s inheritance on a rigid list of “acceptable” behaviors, for example, a principles-based approach allows greater flexibility for trustees and others to make decisions based on the values you wish to promote.

A family mission statement can be an invaluable tool for defining and communicating these principles and values.