As we learned recently at the Morgan Stanley Family Legacy and Governance (FLAG) Institute from keynote speaker Dennis Jaffe, our attitude toward our children must shift from paternalism to partnership. This requires transparency, collaboration and mutual trust. But most importantly, family conversations about wealth require that we first engage in deep work within ourselves to understand our own personal values and opinions as well as what drives and motivates us. Only then, once we have identified what matters to us individually, can we take it to the next level and work to reconcile our views with other family members with an attitude of true partnership. This work gives us a sense of shared purpose and value that helps us build consensus and identify a family mission.
In general, family members report that it is much easier to express their individual points of view than to find a consensus. In our experience, however, family governance planning is most effective when each family member spends as much, if not more, time delving deeply into their own personal relationship with the wealth they spend in discussions. group because only in this sense of his personal relationship with wealth can you begin to engage in conversation with the family to understand where there is consensus and where a difference of opinion may lie.
“Relation to Wealth?” you could ask immediately. “What does that mean? Money is just a medium of exchange. I have relationships with people.
But suppose you think of your relationship with wealth as the values and attitudes you have developed over time as a result of your unique personality, upbringing, and life experiences. How would you describe these values and attitudes? This may be a more subtle question than you initially think.
As in any relationship, your own attitudes towards wealth can be very different depending on the circumstances. For example, you can focus on economic details when buying real estate, but on a broader list of criteria when donating to charity. Likewise, your approach to wealth can vary greatly depending on whether you make joint decisions with your spouse rather than with your child. And your opinions almost certainly change over time.
Keep in mind that wealth can evoke strong positive and negative emotions, and that’s not a bad thing. After all, our emotions can convey useful information about our core beliefs, fears, and personal history.
When your emotions have something to say, try letting yourself feel what you feel rather than repressing it. Then you can translate these emotions into words and determine whether they are based on relevant experiences and knowledge or other influences.
Additionally, some of our emotions and opinions about wealth may be based on assumptions, which may be explicit or unconscious. There can be a lot of baggage. So when you think more deeply about your relationship with wealth, the most honest description is usually “It’s complicated.”
Many of the families we work with admit that having significant wealth creates isolation and loneliness that they did not expect. It is difficult to share with others the challenges and emotions that wealth brings, the fears and insecurities. Creating a forum for an individual and family to have an honest conversation alleviates many of these fears and feelings of isolation.
So how do you begin to have an honest examination of the deep emotions and beliefs that wealth evokes? Of course, that’s a question only you can answer for yourself. However, after working with many families on these issues, we have several suggested questions you might ask yourself. Whatever your specific answers, the exercise can improve the odds that you’ll come to family heritage conversations with a more nuanced idea of how best to contribute to those conversations.
Some of these questions are difficult, and if they are, that’s a good thing because they’re meant to help you see what emotions and assumptions might underlie your opinions.
Image. What image does my wealth convey to others? Is it positive? For instance. A generous person who helps others feel good and improves their lives? A successful person who makes an impact and leaves a lasting legacy? A particularly talented, creative or interesting person? Something else?
On the other hand, am I worried that my wealth will cause others to view me negatively? If so, what specific messages am I afraid my wealth might convey? Do I myself have negative judgments about rich people? Do I feel guilt or shame for being rich? If so, where and when did this negativity originate? Are my decisions motivated by a desire to avoid criticism from others?
Security. Does having wealth give me a sense of security? If so, what does security mean to me: a sense of security? Privacy? Self-sufficiency? Financial stability and a sense of being a responsible contributor to my family and community? Opportunities for adventure and variety in my life experiences? Something else?
On the other hand, does my wealth create feelings of unease or insecurity? Am I afraid of mismanaging my assets or losing them? Do I feel insecure that I can transfer my wealth to my family in a way that helps, rather than hurts, my children and grandchildren? Am I afraid that significant wealth will ruin future generations?
Autonomy. What is my relationship to the respect and power that often accompanies wealth? Do I like wealth to help me control my own destiny, lead others, and protect those important to me? Am I more focused on money helping me avoid unwanted work, unpleasant conflicts, or burdensome commitments? Or am I enjoying wealth as a way to better myself, my loved ones, my community, and even society at large? Or something else?
On the other hand, does my wealth sometimes leave me feeling vulnerable? Do I question the motives of some who interact with me? Do I feel overwhelmed by the decisions my fortune forces me to make? Do I feel controlled by others with whom I share ownership of family businesses or charitable businesses? Or do others report that they are uncomfortable with the extent to which I myself try to control them? Does it make me angry that my wealth defines me and defines who I am?
These are just examples of questions that can provoke helpful self-examination. You can also focus on the messages you received about wealth as a child and the extent to which you yourself embraced or rejected those messages. Also consider how your own attitudes and values toward wealth differ from those of your spouse and children. When making group decisions, are you more inclined to bend to the opinions of other family members or to try to bend others to your own opinions?
Once you’ve engaged in meaningful personal reflection on your relationship and the emotions associated with wealth, it’s time to engage the rest of the family to see what they’ve discovered, too. Do common themes emerge? Is there a sense of shared mission and purpose? If not, can we imagine one and start working on it? A thoughtful engagement with oneself and one’s family is the surest path to a sense of purpose, mission and legacy.
David Bokman is the Family Office Resource Manager and Elizabeth Chand is the Family Office Resource Generalist Manager, both at Morgan Stanley.
