How long does wealth typically stay in the family? The old proverb “shirtsleeves to shirtsleeves in three generations,” which indicates accumulated family wealth largely dissipates by the third generation. However, there are families–sometimes referred to as Legacy Families or Century Families–that persist in transferring wealth across multiple generations. These families transfer more than financial assets; they transfer values and the family story. An estate plan is incomplete unless it takes the family’s values, history, and dynamic, i.e. its qualitative wealth, into account.
While most professional advisors usually provide families with the technical strategies for a successful transfer of financial assets, many do not support the transfer of qualitative wealth. So how do families build and transfer this type of wealth? Williams and Pressier (Preparing Heirs, 2011) recommend focusing on the four elements of trust: reliability, sincerity, competence, and communication. We agree. In our experience, a family can build these four elements of trust by telling the family story that links past, present, and future. By telling (and re-telling) this story together, your family can significantly improve its chances at transferring wealth for three or more generations.
The Power of Story
In the Harvard Business Review Magazine article titled What’s Your Story? authors Ibarra and Lineback argue that storytelling enables us to successfully navigate jarring life transitions. They write, “It is in a period of change that we…most need to link our past, present, and future into a compelling whole” (18). By telling stories, we shape our futures and inspire others to trust in who we are and where we’re headed.
A family story creates order out of the complex and seemingly random events, both good and bad, in the life of the family. Not only does a narrative make sense of the past, it gives meaning to the present, and gives a vision for the future. Ideally, the story is broad enough that each member of the family can find a unique place as a character within the story as time goes on. This will create the “buy-in”—i.e., trust in the family—that is integral to intergenerational success.
Writing Your Family Story
Most compelling stories start with a sympathetic protagonist who pursues an unfulfilled desire. On the way to achieve that goal, the protagonist overcomes obstacles, doubt, criticism, and setbacks by making decisions based on the protagonist’s core principles. At the end of the story, the protagonist has gained new insight about the world and himself or herself. In your family’s story, the protagonist may be the first-generation matriarch or patriarch, but make sure that the underlying hero of the story is the family itself. That way, each family member who tells the story can identify with the family’s challenges and successes over time.
When telling your family’s story, keep in mind that convincing stories are coherent. Coherent stories let the listener discover the deep-rooted “why” behind your actions and identity. These explanations give the listener a satisfying sense of continuity and causality. They convince the listener that despite the family’s ups and downs, its guiding values have stayed the same, and that these values have informed the most important decisions that have been made. A story centered around the fundamentals of value and vision will help keep you and your family on course when changes and crises do occur.
Brainstorming with the Family
If drafting the family story is an interactive exercise at a family retreat, consider having each family member journal answers to these questions before coming back together to write a story together.
- What do you value most?
- What are your aspirations?
- What are your defining character traits?
- What are the “aha” moments of your life?
- What are your greatest achievements?
- What would you change if you could?
Then consider creating a family tree and answering the following questions together:
- What person or people have had a large impact on the family?
- Who started the family business and why?
- What challenges has the family had to overcome on its path to success?
- What mistakes have been made and how can the family learn from them?
- What were the high points of the family’s Journey together so far?
After answering some or all of these questions, the family will be well on its way to telling its story. Now let’s get into the structure of the story—how the information above should be sequenced into a narrative.
The Hero’s Journey
At The Grupp Law Firm LLC, we created a narrative framework for clients called the Heroic Family Journey. The Heroic Family Journey adopts elements of the archetypical hero’s journey to fit the context of a family’s shared experience towards building a Family Enterprise. The family could use the Heroic Family Journey to tell the bigger picture of the family’s history or adapt the Heroic Family Journey to tell the events of one member of the family.
The hero’s journey plot is the basis for most of the timeless stories throughout history, from ancient poems to blockbuster films. Typically, the hero ventures into the unknown in pursuit of a goal. On the Journey, the hero encounters a challenge and experiences life changing transformation by confronting the challenge. At last, the hero brings the insights from that transformation back to his or her community. Take Star Wars IV (the original) as a ubiquitously known example.
At the beginning of the film, Luke is jarred out of his mundane existence by a droid from another planet. Soon Luke receives a “call” to become something more than he is. Initially he resists his mission, but crosses the threshold when he realizes everything he knew has been destroyed. Luke then descends into and partially resolves the chaos of conflict around him as he acts courageously. Through failure and success, he builds competence as a jedi-in-training. Eventually, Luke realizes the true nature of his new identity, gains confidence, and transforms himself and his community when he temporarily defeats archetypical evil (the Death Star).
The Heroic Family JourneyTM
The scheme of the Heroic Journey is relatable. All of us struggle against chaos. All of us must choose between comfortable stagnation or risky transformation. At The Grupp Law Firm, we use this Journey to describe our client experience from initial contact with the firm to ongoing administration of the estate.
We also encourage our clients to discover and tell their own story, whether personal or the broader family history. Because this Journey is cyclical, it can keep developing and unfolding as the rising generation gradually take control of the family enterprise, encounter new challenges, and experience transformation. By fitting the events of the life of the family into this framework, the family can gain a shared perspective that acts as the glue holding together its members.
Let’s get down to the nitty gritty details, to show how we’d go about writing a case study story. First, there are four stages to every Heroic Family Journey.
1. Call to a New Way of Life: Some event has happened that jars the family from “life as usual” and makes the family look for a solution. For example, this event could be, for example, the sale of a business or the death of a family elder.
2. Crossing the Threshold: The family makes the decision to build a plan for a multi-generational future together. Although this takes commitment, the work is worth the reward.
3. Solving Complexity: The family implements its plan and over time solves the complexity of governing the Family Enterprise. In addition to developing family governance and education plans, there are also plethora details relating to the integration of legal, tax, and financial planning across the various legal entities and accounts owned by the family.
4. Transformation: The family experiences transformation as both the family as a whole and its individual members lead flourishing lives. The family has a cohesive response to new challenges, transmits Wealth, and incorporates the rising generation into leadership positions.
Storytelling: the Nitty Gritty
That’s enough information to write a compelling narrative. However, we could dive in deeper to look at what happens within each of the four stages of the Journey. There are five steps.
1. Unexpected Event—something surprising interrupts protagonist’s pursuit of a goal
2. Complication—protagonist doesn’t understand why things are falling apart
3. Crisis—protagonist comprehends the situation and breaks it down into a choice
4. Climax—protagonist chooses one of the options
5. Resolution—protagonist moves closer to his or her goal
This feedback loop repeats at each level of the story as the family moves towards its goal of flourishing.
If we take each of the four parts of the family’s Heroic Journey and include each of the five storytelling steps within each part, we have an essential story of about 20 sentences. This is a manageable project that the family could draft together in an afternoon at a family retreat.
Below is a case study of how we would tell the describe Heroic Family Journey of the “Smith Family”. This family has decided to work together to build a family enterprise. It tells the story of their engagement with The Grupp Law Firm.
Writing Your Family Story: Case Study
1. Call to a New Way of Life
The sale of the family business Smith Manufacturing and the retirement of the 1st generation of John and Mary Smith compel the family to look for new ways of conducting their affairs. Without the strong guidance of the family patriarch and matriarch, the three members of G2 (and seven adult members of G3) now need to collaborate to keep the family legacy alive and shared wealth intact.
The family meets with The Grupp Law Firm and receives news of exciting possibilities, such as building a private family trust company. However, they also realize that a comprehensive plan will involve hard work and commitment to put into practice. At a family meeting, they vote in favor of moving ahead with a shared future, although they are not yet sure how this will look. G2 assists G1 in assembling information and engaging a professional evaluation from The Grupp Law Firm LLC. At a two-day retreat with their new advisors, the family receives a clear and exciting map of the Journey ahead.
2. Crossing the Threshold
At the 2-day retreat with The Grupp Law Firm, the family received a road map describing their current state and their future journey. Now they need the courage to actually build a plan that will serve the family for future generations. There are many decisions to make on governance structures, education programs, and goals for shared wealth. When at last the estate plan and wealth strategy come together, the family inks the legal documents and financial accounts. The hard creative work is complete, and the family has a governance structure, defined mission & vision, and set of goals that they can be excited about.
3. Life with Complexity
At first, implementation is challenging for the family. There is a certain complexity of doing things right and getting used to shared governance. However, the family quickly embraces not only new structures, but also a new mindset and active ownership. Once the family adopts a new worldview and actively drives its own development, the family begins to build competence. It gains the ability to manage risks, strengthen relationships, work within new processes and structures, and solve complexity. Over time, the family can spend its energy on developing its family Wealth—the value of what family is, has, and does. The family might also engage in activities such as philanthropy or entrepreneurial projects.
4. Transformation
Over the next few years, the family encounters some internal and external challenges. Some of these are positive events. For example, there are new family members being born, two new entrepreneurial ventures, and three rising generation moving into governance positions. There are also negative events—a divorce and a death in the family. What the family discovers is that while these events might have weakened or entirely disintegrated the family cohesion, they in fact could overcome this challenge through a robust structure and, most importantly, a shared narrative of identity together. The family has experienced transformation. The family is not only staying together, it is improving the lives of individual family members as well as the broader community.