Where to Turn: When Life's Obstacles Challenge Wealth Planning
Inheriting Wisdom ™

firm helps families tap intangible assets
Dow Jones Financial Adviser Blog - September 15, 2010

For wealthy families, keeping stories and traditions alive is more than a matter of collective pride. It can also serve as a bridge across generations to safeguard values and fortunes alike.

This is especially true for large families that lack a central rallying point–a business, say, or a commitment to philanthropy. They can easily drift apart, their assets disintegrating. At the very least, they can be hard for wealth managers to advise and retain, according to Carolyn Friend, co-principal of the Chicago-based consultancy Inheriting Wisdom.

That is why she and Jamie Weiner, her co-principal and husband, work with ultra-wealthy families and their advisers to come up with legacy plans rooted in family traditions.

Friend is a clinical psychologist with more than 20 years of experience, but says, “What we do isn’t just about psychology.” Their work starts by helping families appreciate the value of their histories and traditions, and is designed to end with a comprehensive plan for preserving what’s truly important.

“Most conversations about legacies are 99% about assets; the tangibles,” says Friend. “But the family’s real power comes from the intangibles–and most families don’t even have conversations about that.”

Weiner gives an example, from his own family, of a life lesson that was nearly lost. A few years ago, he came across documents that put his paternal grandfather in a new and inspiring light: He was a self-made department-store tycoon in Dresden, Germany, before the Nazis took almost all he had because he was a Jew. After a series of adventures, including a run-in with the SS, he found refuge in Britain. There he slowly rebuilt his fortune in real estate.

Sharing stories like this within a family can help instill common values. First-person accounts of success and failure, shared at family gatherings or one-on-one with relatives of different generations, can also help create and reinforce a legacy.

“It opens the door to communication,” says Weiner. And with proper facilitation, he adds, this openness can be turned to discussions around the pivotal question, “What is wisdom?”

From there, families can develop and communicate messages calculated to unite rather than alienate. To break the habit of elevating those most involved with making or preserving money, for example, family members can agree that genuine effort–to whatever end–is a positive value. “Families can agree that hard work is what made them wealthy in the first place, so they can agree on the wisdom of working hard,” says Friend.

Friend and Weiner also urge families to redefine their values periodically to keep from getting stuck in the past or excluding mavericks who may become leaders.

In what Weiner calls “a successful work in progress,” he tells of a family that’s being led by a former black sheep to a radical new definition of its legacy–from one based solely on business to one that blends money-making with philanthropy.

Inheriting Wisdom was established in 2004. To date, it has worked with about 800 individuals from families worth between $20 million and $450 million.

Thomas Coyle is a special writer with Dow Jones who focuses on wealth management. His columns are available to Dow Jones Adviser subscribers.

Click here for the original article published on the Dow Jones Financial Adviser blog.

Or, click here to view a PDF version of the article.