The most important issue in my view, is not leaving assets to future generations but rather preparing the future generations to manage whatever assets are available.
One thing we realized is that even if families may be held together by the patriarch or matriarch, at the time of passing of the head of the family, the social fabric tends to disintegrate. When the glue that keeps them together fades, and therefore they have no more motivation to keep working together. That in itself does not support the further existence of the estate as one entity. So to begin with, after having been together through a patriarch the family should also be interested in continuing to work together , each members needs subjected to family objectives.. However, apparently that is not the case.
In many cases the testator may decide to try and separate /break down the estate even before they pass. That's a more pragmatic way. If the beneficiaries are going to waste it, so be it.
But even better is to set up testamentary trust where the second generation are only trustees because they should have made it anyway. Sometimes the third generation are also mere trustees and it's only the fourth generation that stands to benefit from an estate. This can be put in place and would help to sustain the estate.
We keep witnessing this and many times we miss the lessons and it's in the lessons that we can find ways to prepare better.
Someone once said, don't prepare wealth for your children, prepare your children for wealth and this ideally calls for intentional parenting.
Every family has a blueprint on how they were raised.
What comes on top as a question even before we think of inheritance is the value system?
- A will most times acts as reactive way of doing things. Why should people get to know what they are going to do with the wealth after I am gone. Why not start educating or involving children early. It starts with talks at the dinner table about wealth, how to get it, manage it, etc. But today, children only know that my father or mother is rich but don't know about the process of wealth acquisition. They were never in the conversation through out their life. Today a child doesn't know the A, B, C's of financial education. Some don't know what an Asset or Liability is.
It is written that a wise man lives and inheritance for his children's children. I want to believe that an inheritance comes with a heritage as well. This means that heritage comprises of family values, systems, etc. In fact if a child can grow to know how to fish on their own, manage the fish, etc. We will have done well. Children today don't have to grow up with the entitlement of my father has this or that. That's their father's wealth and they should know everything their father did to get there and and that the values should be passed on, values of hardwork, sacrifice, dedication, management of wealth, acquisition, etc.
People are being left wealth but not being left with the education on how to get it. The education on how to get it stands, it can be passed on from generation to generation whether money is there or not.
Children have to be taught about personal responsibility and how it is key to achieving anything. Besides physical assets, those spiritual and emotional assets stand tall.
These are my few cents. The focus should be on heritage(values, virtues, systems, etc) not only inheritance(land, money, assets, etc.)
It's so sad that this is the current reality in our country. This failure of those accumulating the wealth to setup or assign the appropriate management of the generated wealth explains why we have very few families with generation wealth. Every time the heads of the family dies....the next conversation is how to divide the accumulated wealth amongst family members instead of how to grow it further.
Alex, it would be nice to have a podcast about this preferably with some estate managers & lawyers experienced in this area.
The most important issue in my view, is not leaving assets to future generations but rather preparing the future generations to manage whatever assets are available.
One thing we realized is that even if families may be held together by the patriarch or matriarch, at the time of passing of the head of the family, the social fabric tends to disintegrate. When the glue that keeps them together fades, and therefore they have no more motivation to keep working together. That in itself does not support the further existence of the estate as one entity. So to begin with, after having been together through a patriarch the family should also be interested in continuing to work together , each members needs subjected to family objectives.. However, apparently that is not the case.
In many cases the testator may decide to try and separate /break down the estate even before they pass. That's a more pragmatic way. If the beneficiaries are going to waste it, so be it.
But even better is to set up testamentary trust where the second generation are only trustees because they should have made it anyway. Sometimes the third generation are also mere trustees and it's only the fourth generation that stands to benefit from an estate. This can be put in place and would help to sustain the estate.
Very well put on setting up the Estate in a way that ensures who is the trustee and the ultimate beneficiary of the whole estate.
Thanks for sharing this Alex.
- This is as true as you have written.
We keep witnessing this and many times we miss the lessons and it's in the lessons that we can find ways to prepare better.
Someone once said, don't prepare wealth for your children, prepare your children for wealth and this ideally calls for intentional parenting.
Every family has a blueprint on how they were raised.
What comes on top as a question even before we think of inheritance is the value system?
- A will most times acts as reactive way of doing things. Why should people get to know what they are going to do with the wealth after I am gone. Why not start educating or involving children early. It starts with talks at the dinner table about wealth, how to get it, manage it, etc. But today, children only know that my father or mother is rich but don't know about the process of wealth acquisition. They were never in the conversation through out their life. Today a child doesn't know the A, B, C's of financial education. Some don't know what an Asset or Liability is.
It is written that a wise man lives and inheritance for his children's children. I want to believe that an inheritance comes with a heritage as well. This means that heritage comprises of family values, systems, etc. In fact if a child can grow to know how to fish on their own, manage the fish, etc. We will have done well. Children today don't have to grow up with the entitlement of my father has this or that. That's their father's wealth and they should know everything their father did to get there and and that the values should be passed on, values of hardwork, sacrifice, dedication, management of wealth, acquisition, etc.
People are being left wealth but not being left with the education on how to get it. The education on how to get it stands, it can be passed on from generation to generation whether money is there or not.
Children have to be taught about personal responsibility and how it is key to achieving anything. Besides physical assets, those spiritual and emotional assets stand tall.
These are my few cents. The focus should be on heritage(values, virtues, systems, etc) not only inheritance(land, money, assets, etc.)
Thank you Arthur, I couldn't have put it better.
Thank you. The conversation is good. It's much needed.
Our churches, mosques, communities, schools, political centres, etc, should be talking about this.
It's so sad that this is the current reality in our country. This failure of those accumulating the wealth to setup or assign the appropriate management of the generated wealth explains why we have very few families with generation wealth. Every time the heads of the family dies....the next conversation is how to divide the accumulated wealth amongst family members instead of how to grow it further.
Alex, it would be nice to have a podcast about this preferably with some estate managers & lawyers experienced in this area.
Otherwise, thank you so much for sharing this.
Look at the process of getting a tittle, it's breath taking.
Thank you Mr Alex to share this piece of information with us. But to me I think that even the land reforms of our country plays a vital role.