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THE VISION Generating the vision


All too often, the skills and values that created wealth in the first place don’t make it through the generations. Zinzan Cunningham talks with Paul Lucas, an Australian lawyer who practices in the area of family business and management/ownership transition, and looks at ways how you can help your children to become stewards of the family legacy.


W Stewardship


“Beneficiaries think in terms how they can manage the family wealth for the benefit of all family members and for subsequent generations. ‘What is in this for me?’ becomes ‘what is in this for us?’ This is now evident in the use of the family office, a structure that is becoming better known among families with wealth. In these families, the wealth is pooled for the benefit of all and, often with a goal of improving wealth for subsequent generations.”


– PAUL LUCAS


hile some children see their legacy as something they can develop for the generation after them, others look at it as if it were ‘nothing more than I am entitled


to’. That attitude, according to Paul Lucas, an Australian lawyer who practices in the area of family business and transition management, is not healthy. When there is a focus on entitlement, says Mr Lucas,


attitudes to money can become more consumer-like in nature. “It becomes a case of: ‘I have this wealth and I’m


going to use it for my own needs’,” says Mr Lucas. That sense of entitlement can seriously increase


the risk of conflict among family members as others become concerned that one might receive more than they deserve. “Most of us don’t intend for our children to think like


this, but certain environments cultivate this culture that gives rise to these attitudes. The child who receives almost everything he wants is more likely to have an attitude of entitlement. ‘It is there when I ask, and that should be the way it continues’.” Many parents, he says, have difficulty talking to


their children about wealth and wealth management. How much wealth do we have? How much do we need? Where did it come from? What do we plan to do with it? This is particularly evident in the Baby Boomer first generation entrepreneur. “For many, it’s easier to think, it’s there, and it will


continue to be there. When this message is passed to children, entitlement issues can build within their character.”


Issues of entitlement “When one of the children has this feeling of ‘this is mine – the legacy is nothing more than I am entitled to’, then the conflicts are difficult to avoid,” says Mr Lucas. “I have seen siblings spend millions of dollars in legal battles fighting over legacies which, in many cases, did not justify the expenditure. In one such conflict, one brother took his own life before the case could be heard. An alternative, he says, is the concept of stewardship,


28 FAMILY OFFICE: THE FUTURE


where the beneficiaries think in terms how they can manage the family wealth for the benefit of all family members and for subsequent generations. ‘What is in this for me?’ becomes ‘what is in this for us?’ “This is now evident in the use of the family office, a


structure that is becoming better known among families with wealth. In these families, the wealth is pooled for the benefit of all and, often with a goal of improving wealth for subsequent generations.”


Shifting mindsets The culture of stewardship requires a different approach, says Mr Lucas. How do you move a family from entitlement towards stewardship? Culture, he says, is learned early in the life of a child from the behaviours of the parents. Once the culture is established, it is difficult to change. “Where the child sees parents who work hard, do not


talk about the problems and successes of the business, the child may be left with the impression that the building of wealth is the value of greatest importance. When they receive everything they ask for, they have the impression that it will always be there. “Parents can set their own goals as to the values


they wish for their families, and then work towards those behaviours which result in a culture around those desired values. It is better to start early in this endeavour. When the goals are not set or the plan did not achieve the desired goal, then the changing of values and the culture is more difficult and requires more time.” One way to bring about change of culture or


mindsets, he says, is to set projects for children that develop their financial values and shift them into a mindset of stewardship. “One entrepreneur I know has a one-on-one meeting


over a lunch with each of his grandchildren shortly after their eighteenth birthday. He tells them that he intends to give them a sum of money, then asks them to set some goals for the investment of that sum, how they might go about investing that sum, what advice they might obtain, how they will monitor the outcomes. As a


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