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Family Fiduciary Secret #5:
Plan Around Family Dynamics

When you think of estate planning you usually think your attorney has all the answers. In today’s secret you will learn:

  • How estate planning usually starts with a money problem.
  • Why your family dynamics are at least as important as your money.
  • What you can do to address both issues together.

Estate planning does not have to be a chore. Done properly, it can be an exercise in building a future where the entire family grows and thrives, now and later.

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VIDEO TRANSCRIPT

Now there’s a very interesting situation where a family came to us. The patriarch was in his late 70s and he was recovering from a stroke. They had five children and one of them was a CPA who was concerned that they were going to have to pay a large estate tax. His father had almost died and his mother was still alive, but they were really concerned about the estate tax issue.

So the family was brought to us by an estate planning attorney and we sat down with them. Many people think that that’s where you go to solve the estate problem — and you do because the attorneys are really good at it. They know what has to be done legally, but there was a family dynamic that was involved here.

There were five children and a couple of them that worked in the family business. The son that was a CPA was the trustee for the family, so we had this family dynamic that was kind of forming, but hadn’t gelled yet. Their initial problem was estate taxes, but the underlying problem was how do we get all the children to play nicely in the sandbox?

We went through our planning process to find out what it is that they really wanted. We went from a very simple estate plan where they were going to leave the real estate and the business to their children. They were just going to divide it up by five and each child was going to receive a fifth and they were going to pay taxes.

However, it transformed into all of the children being involved in a family enterprise that they created to manage their real estate and their business. Each one of the children had a seat on the board and the parents got to watch these children, who were in their 40s and 50s, operate the enterprise while they were alive. The parents saw that they could keep it together and that in doing so, it brought the family closer together and they all ended up with more money.

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