James H Lannan

MANAGING FAMILY DYNAMICS & TALKING ABOUT MONEY
The seeds of family wealth success are planted when you talk to your kids about responsibility & money!

You are ready to exit your business. Exciting time in your life. As you imagine your family's future, you hope your wealth will be the foundations of a lifestyle you never imagined. You stand in the "business exit doorway" ready to step into the a new era of your life.

Change is coming soon:
Not your first rodeo in "life transitions."
Remember the early years of parenting: suddenly you realize kids are not born with training manuals. Ironically, you began to look at risk in a new light, as you said: "Now I understand what my parents tried to teach me!" Moreover, new discoveries about risk did not end there, from grade school to the day your kids were finally "off the family payroll" graduating college.

Next, reflect on the similar journey of risk management as the founder of your business: perseverance through decades of economic & market change. As you are ready to sell, your attention is entirely focused on the potential "value of shares" in your company. Good news, you are exactly where you are supposed to be. We are honored to accompany you in this life transition.

The Road Less Traveled: The fruit of perseverance is the wisdom to look beyond victory over defeat
The commonly recognized idiomatic expression "Taking the Road Less Traveled" originates from both the poet Robert Frost, and author M. Scott Peck. Perhaps you understand that expression as a maxim about: entrepreneurial risk, non-conformity, individualism, and a spirit of adventure. Many successful entrepreneurs do.

Years ago, I remember an important client had a copy of Peck's book in his office. My client reflected on the journey of growing his company to a multi-million dollar business valuation, having just negotiated a formal agreement to sell. Beaming with natural emotions in victory, he applied such an analysis of the "Road Less Traveled," while stating:

• "In order to be successful, Go where no one else goes… Do what no one else does!"

Can you relate to such an experience when you reflect on your past victories? You are understandably thrilled as you enjoy the fruits of personal sacrifice and smart execution. Yet, you may be surprised to learn that such an entrepreneurial interpretation of "The Road Less Traveled" is very far from what Frost & Peck originally intended. The original interpretative distinction is best understood when we hear from the authors themselves:

• Frost commented on the meaning of his classic poem, saying:
  "I summarize life's wisdom in three words: "Life goes on"
• Inspired by Frost's poem two generations later, the opening line of Peck's book is: "Life is difficult"

It is crucial to understand this exciting moment in your personal & professional life is NOT solely about achieving victory. Rather, a successful multi-generational entrepreneur embraces this moment as one of personal growth and spiritual renewal: finding meaning in perseverance, learning patience when pushing through boundaries, and understanding a family's place within community.

Unintended consequences in success:
Do you ever ignore what you don't understand?
The reasons why parents "wait too long to talk to their kids about money" are found in the messiness of personal desires in parenting. You were likely raised by a generation when money was a topic you never discussed. Moreover, your focus as a parent is to give your children "quality education & lifestyle-comforts" better than you received. Very admirable desires.

Yet, like most parents, it is very possible that you never invested in the necessary time forming your children's relationship with money so if you were to suddenly die today, the wealth you accumulated will be responsible hands. Consider the following constructive discovery questions about your children's & grandchildren's future inheritance:

• "Have you ever considered the unintentional consequences
  of immediately providing your children those "better-life-comforts" you never thought possible?"
• "Are you certain your children possess the good habits and necessary discipline
  that you naturally developed in order to attain the wealth they will soon inherit."
• "Are your children ready to inherit millions of dollars of wealth?
  (i.e. they possess emotional, maturity, knowledge about money & acquired discipline of work ethic)

Too often, children do not acquire the necessary discipline that naturally develops along the journey of "work & sacrifice" to take responsibility for the wealth they will inherit. Financially successful parents are not at fault in this regard. Still, in hindsight, the critical lessons of estate planning iare clear: Success in entrepreneurship often creates unintended consequences within families that parents, initially, do not understand. Successful multi-generational families identify & prioritize this serious need; then they take responsibility and seek professional advice.

Morgan Stanley can help your family
Our clients truly want to receive both tangible monetary, and relationship value for the advisory fees they pay us. They want the family to receive far more than investment management and tax efficiency in wealth transfer. Successful families sustained by wealth across multiple generations implement a disciplined, repeatable & process-driven Family Wealth & Education Plan. We can help you form a new family paradigm in managing family dynamics & talking about money. Give us a call to discuss!