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Family Friendly Inheritance

Peretz Partensky
Estate planning can involve much more than just inheritance, and good plan can help give a family direction in the wake of a loss.

Most conversations I have with folks about estate planning starts out with two goals: avoid taxes and treat everyone equally.
As important as those two goals might seem in the beginning, I must admit they don’t exactly stir my soul. What do you want your grandchildren to remember you for? “Grandpa sure did avoid some taxes when he died, and he could divide by five, too!”
I once worked with the family of a wealthy couple who had several children, grandchildren and even great grandchildren. The family was stuck on issues of “equality” and “fairness,” both of which are very difficult goals to achieve in estate planning, primarily because everyone has a different idea of what is “fair” and “equal.”
We finally made progress when I asked them to back up and talk about what they really wanted for their family. Once they thought we were off the topic of estate planning, family members opened up and talked about “unity” and “love” and “memories” and “togetherness.”
Everyone warmed up to values like that.
Over the years a lot of family memories were made at the couple’s lake camp, where they skied and cooked out in the summer and duck hunted in the winter time. Uncomfortable conversations had already arisen about who was going to get the land on the lake where all the fun was had.
Rather than a plan that would cause division, this family chose a plan that would foster unity. A family owned Limited Liability Company (LLC) would own the waterfront land and other assets better left undivided. That called for a system of “family governance” that would “force” family members to work together to reach decisions concerning land use and distribution of any profits from farm land they also owned.
Another family created a charitable family foundation that took family money and distributed it to causes deemed worthy by the family. Again, a system of family governance was instituted to oversee the foundation, thereby encouraging future family members to work together.
Always consult appropriate tax, legal or financial counsel when considering any business form like an LLC, charitable foundation or other such entity.
Control from the grave is nearly impossible to achieve (and rarely appreciated by the heirs). But influence and a legacy of family values is not only possible with careful and creative planning, but may be the most long-lasting gift you could leave behind.


Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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