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The Legacy Planning Table - Who Has a Seat?

The Legacy Planning Table

At the planning table when the parents draw up the documents with advisors, who has a seat?

1. Mother and Father
2. Tax Attorney
3. CPA
4. Financial Advisor
5. Trust Officer
6. Insurance Professional
7. Business Valuation Expert
8. Philanthropic Consultant
9. Fundraiser/Planned Giving Officer
10. Family psychologist or family facilitator

1 and 2 certainly. Most likely 3 and 4.  Possibly 5. Very likely 6.  Sometimes 7 . Rarely 8.  Almost never 9. Seldom 10, though it may be a good addition.

How about the children, the grown heirs? Seldom or never, yet what a difference for the better it could make to include them before the plans are drawn. Children who are included will not "misread" the final documents as a critique of them. ("Daddy rules me from the grave through my trust officer because Daddy never loved me, never trusted me, and hated my boyfriend. He called my boyfriend a 'predator.' Why did Daddy do this to me? How did I deserve this? No one will ever love me for myself, only for my money. My peers just want to get a loan. No one can understand why I never had a job. Why should I work? My trust gives me more than I could ever make. I have done nothing all my life. I am a failure!") For jolting insights into the Boomer experience with inheritance, see the books documenting many heirs' experiences at The Inheritance Project)

Case Study

Imagine that a family has $10 million. Imagine that if both parents die tonight that the scorecard is like this:

Plan A - Current

$7  million to children
$ 3  to the IRS
$ 0 to charity

Now imagine that with a little work it could look like this, a tax efficient plan.

Plan B

$ 9 million to the children
$ 1 million to IRS
$ 0 to charity

Now imagine that it could also look like this.

Plan C

$ 0 to IRS
$ 10 million to children: Some outright, some in trust, and some in a foundation they can manage.

Who is to say which of these plans, or many more, is "best"? Who is to say which is best for the children, and then the grandchildren down the line? Can parents makes these difficult decisions wisely without giving the grown children a seat at the planning table?

The Rising Generation

I am encouraged by what I see of Gen Y heirs. They have a healthier attitude about inherited wealth than did the Boomers who have filled shelves with books like "The Dark Side of Wealth," about the psychodrama of secrecy and family intrigue around inheritances and its lasting and devastating effect. The new generation is, I hear from its members, politely but persistently asking for their seat at the table when the planning that will impact their lives and their own children's lives is done.

Tip for Future Heirs

What follows is a "best practice" gleaned from an heir who shall remain nameless. She is very bright, a grad student at a top university, and "out" about her money. She is active in giving circles and in peer circles with other Gen Y philanthropically active heirs. Here is what she did:  She had her own financial, estate, and legacy plan drawn up to deploy her own now paltry assets. She took that plan to her wealthy parents and said, "Well, here is my plan. May I see yours?"

Tip for Parents

Why not suggest your children do a financial, estate, and legacy plan for themselves. See how they do. Assist them only if they ask. Let them muddle through. Suggest they have you look at it and offer an opinion. Then, perhaps, you will be willing to share your plan. If you think about it, your child's plan will not change your life, but your plan will certainly change his or hers. As you reflect on the planning scenarios open to you, would your heir's input not be relevant? You can ignore his or her expressed wishes, and perhaps in some cases you should, but those wishes are relevant, and may outlive you, whether in joy or bitterness.  You get the last word in the legal documents. The kids get the last word interpreting your life is family stories. Your legacy is more than money. Let it be more than ashes. Let it be wisdom, courage, and joy.  Let how you do your plan, the virtues your planning process embodies, be the tradition that lives on in memory, imitated by your heirs and on down the line. 

What Counts as Winning in Legacy Planning?

Lower taxes, transmission of family values, creation of autonomous adults, passing of business interests, the family's multi-generational impact on society? What counts as winning for you as parents, or as heirs, and how will you work towards the shared win that will unite the family, and help it stand for what you as a family know is right? A wise planning process maybe starts with open conversation among the stakeholders. If that is difficult, you can be sure that the reading of your will is going to be a tumultuous day. Why not face forward into the difficulties and resolve them as best you can while you are alive, before the attorney stands up in his dark suit, soon after your funeral, to read the legal language that will strike a chill in the hearts of those you love? There should be "nothing new" in the documents read at your death. The plan was made together; you pass the  baton;  and the  race  goes  forward, generation by generation in love, joy, and forgiveness.

My Flamingo?

My flamingo? Jeff's flamingo? To whom does this flamingo belong? Can I give what I don't own? If I keep it, have I "borrowed" it, liberated it, (mis)appropriated it, mastered it, made it my own, killed it, or stolen it? Who will lay down the property laws of its transmissions and transactions?  Locke, Borges, Malinowski, Lewis Hyde? In its  journey will it  define a Community of Fools?  I will do my best. 

Of Wealth and Virtue: The Instructive Story of Cornelius Vanderbilt

From History News Network comes this fascinating look by Edward Renehan at the culture of philanthropy in the time of Cornelius Vanderbilt. As we have Think Tanks, so in his day the strikingly named London Society for Bettering the Condition and Increasing the Comforts of the Poor promoted the belief that giving to the poor was generally bad because it encourages vice and indolence.  In America the same analysis was made by The Society for the Prevention of Pauperism:  The poor are mostly undeserving and are best served or contained in workhouses and debtor prisons. The strong survive, the weak perish, and the race is purified of its weak beings and its cultures of failure.  The article shows how this strain of Social Darwinism influenced Vanderbilt and others, reducing or squelching their commitment to giving to the poor.  And, the article traces the "tough love" philosophy down to Ayn Rand and our contemporary conservative thinkers.

When, at Hudson Institute's Bradley Center for Philanthropy and Civic Renewal, Bill Schambra calls for less welfare for the poor and more help from private philanthropy, one can only wonder.  Once welfare is dismantled, and the tax breaks given, will wealthy conservatives step up their giving to the poor? Or, will the arguments and alibis used to make welfare seem a corrupting influence on the poor be recycled and returned to their earlier context, becoming once again a critique of charitable giving to the undeserving poor? Will the rich man who disdains having his tax money go to the indigent, step in to give his money through a nonprofit intermediary, or will he simply walk off, his heart hardened, and his conscience clear, to spend the money on his own deserving self and his own deserving heirs? Sadly, that is mostly what Cornelius Vanderbilt did. His heir, though, the one to whom he gave almost all his fortune, did little to preserve it, and the family, once (in inflation adjusted terms) three times richer than Bill Gates, has seen its dynasty crumble.  Several of the heirs, it seems, contested the  patriarch's will, accusing him of being insane.  The case dragged on; the chosen son, the one who was to inherit almost all, committed suicide.

In the dialogue of Virtue and Wealth, Dame Fortune may have the final word.  Had Vanderbilt listened to the Christ of the Gospels, or to Maimonides with his ladder of giving (or justice), or to the Stoics who counsel detachment from worldly passion, rather than listening to the think tanks of his era, might Vanderbilt's family have been better and done better, not only for society, but for themselves? Unwisdom, selfishness, and sophistry are like vipers we breed in our hearts at our own peril.

Dig Up Dinosaurs at Ameya Preserve

There is more: If you are one of the privileged few to purchase a multimillion dollar home site in Ameya Preserve, the gated Community of Conscience where Nature Meets Culture in Paradise Valley, Montana, you will also have the exclusive opportunity to dig up dinosaur bones thanks to a $3.275 million dollar grant to MacArthur Genius Grant Winner, Jack Horner from Wade Dokken, the social entrepreneur behind Ameya Preserve. 

I have been consistently passed over for The Genius Grant, but I will be available outside the entrance to Ameya, in the Dumpster in the public right of way just to the left of the guard box, to offer Morals Tutorials to residents. No grant from Wade Dokken funds my work. No publicist from Porter Novelli scripts me. In the spirit of my Lord and Master, Jesus Christ, I as a born again Morals Tutor to America's Wealthiest Families will offer my services strictly pro bono publico, until Wade calls the cops and they run me off. The Geniuses who walk the grounds are tame deer by comparison. These Social Venture Capitalists must shoot us real geniuses on the hoof, from helicopters or jeeps, as best they can. They treated Jesus no better, and for the same reasons. He came to save us from all that. 

More on Ameya, particularly the culinary aspects, from the Gristmill.

Fundraising in Contempt of Congress

Sally, at White Courtesy Telephone, riffs on a Rush Limbaugh's recent $2.1 million fundraising coup. What Limbaugh auctioned off for charity was a letter signed by 41 Democratic Senators rebuking him for his remark that soldiers who protest the war in Iraq are "phony soldiers." When in the human body the lower rules the higher what comes through the mouth is stench. When in the body politic the lower rules the higher we have Rush Limbaugh. As Karl Kraus wrote in Vienna, in the 1930's, "The secret of the demagogue is to make himself as stupid as his audience so that they believe they are as clever as he. " Still, Rush is a rich man. I would love to get him as a Moral Tutorial client. As his Homme de Confiance, I will help him pass on his family values in a Dynasty to last one thousand years. 

Sinners! Philanthropy Can Turn Your Life Around

Habermas summarizing G.H. Mead on identity creation and maintenance:

To the extent that the adult can take over and be responsible for his own biography, he can come back to himself in the narratively preserved traces of his own interactions. Only one who takes over his own life history can see in it the realization of his self. Responsibility to take over one's biography means to get clear about about who one wants to be, and from this horizon to view the traces of one's interactions as if they were deposited by the actions of a responsible author, of a subject that acted on the basis of a reflective relation to the self.

Depending on your own particular situation, on what you have done or failed to do in life, and what has become public knowledge, recuperating your moral biography, sanitizing, obfuscating, or redeeming it, can be a big project calling sometimes for drastic measures. Having been addicted myself to alcohol and gambling while serving as a prostitute in a think tank that shall remain nameless, I was tried and convicted of three counts of racketeering, one of money laundering, and one count of loitering in the public square solicting illicit trade.  Getting Born Again in prison wiped the slate clean, but still did not net my life out to a positive.  How was I going to tell my mother?  I finally turned my reputation around by setting myself up as Morals Tutor to America's Wealthiest Families. That became a story I could proclaim proudly, plastering it all over the internet. As a philanthropic specialist much of my work is really that of a ghostwriter or PR consultant, though I call it morals tutoring. I help rich people, some good, some bad, use a big gift to make their own life stories come out even. It is good for them, good for society, and I make out like a bandit.  Truth is often the only victim and she has been abused these many years long past caring. For a benign example of philanthropy-self-fabulists, see Bolder Giving. 

On a public-spirited note, I would be happy to help Richard Mellon Scaife and Conrad Black restore their moral biographies through sacrificial giving for the public good.  It has worked for Michael Milken, and lots of others too.  If a wretch like me can turn his shameful moral biography around by associating himself with philanthropy, so can just about anyone.

Finding True Happiness in Ameya Preserve

Eudaimona in Greek can be translated as "happiness," as in the pursuit thereof; or, it can be translated as "human flourishing." The Greeks had a saying, "Call no man happy until he is dead." Clearly they were talking about more than a mood, more than what a pill could evoke.  Eudaimonia is a term of last resort. A founding term. So are Markets.  When we look out at the world around us some see a Market. A social capital market. Everything else can fit in that picture. Ameya Preserve is a Community of Conscience where Culture Meets Nature, the houses sell for $2.3 million, and winners of Genius Grants walk the grounds like prize peacocks or like Castrati in an Italian Opera. That is the good life, the life well lived, as seen by a 28 year old liberal arts grad at Porter Novelli writing what she must know is a line of bullshit that will either snow Wade Dokken, or that Wade will see through but understands will snow the vulgar rich as they page through the Neiman Marcus Christmas Fantasy Book. Every term you can possibly want is harmonized: Nature, Culture, Venture, Virtue, Profit, Community, Conscience, Genius.  And it is all bullshit as a local Montana blog says.

This is what happens when we look at the world using as our term of last resort, our lens, our system of explanation, and our point of purchase, "Markets." We know that we can purchase the 28 year old cubicle dweller's bullshit from Porter Novelli, and we can purchase the land in the wilderness, and we can add one to the other, rent some Geniuses, and make it all come out at a profit, while basking in glory as a Social Venture Entrepreneur.

But will we have human flourishing? Or, will we have simply let our disease, the disease of the body politic, the disease of markets metastasize?

Human flourishing happens in an ecosystem,of human institutions, of markets, of nonprofits, of laws, of literary, religious , ethical, and philosophical traditions, functioning within a fragile, natural ecosystem, of which our own biology is itself a part. 

The Happy Tutor, in my recent conversations with him, said, "In any therapy of the soul, Phil, there are cases terminable and interminable. There are some souls we cannot cure, as a practical matter. But if Porter Novelli or Wade Dokken want a Moral Physician for their Residents at Ameya Preserve,   I would be willing to set up a Medical Scene Room, in a Dedicated Branch of Wealth Bond* age pro bono publico.  There, as in an Ameya Triage Unit, I would do what I could,  Resident by Resident, to save as many souls as I can. Even on the cross one of the thieves was saved. But such suffering in extremis is sometimes what it takes to find true happiness.  We find ourselves in 'brokenness and surrender.'  As a good physician, I will not write Wade and the lapsed liberal arts majors at Porter Novelli off until the very moment of their physical death. Who am I to pull the plug? The holy spirit moves even in those market-driven creatures whose faces are full of wounded vanity and rage.  The cure is therapeutic speech (pharmakon, meaning both medicine and poison) such as I administer here, in carefully metered doses, not to hurt but to heal.  Out of such strenuous dialog (dia-logos) or shared understanding  comes  metanoia and new life.  Metanoia means mind shift in Greek, but is translated in the Bible as 'repentance.' We are all sinners here. There is nothing that Porter Novelli or Wade Dokken have done that I have not done,  worse and for less money.  We are all Pimps and Whores, Dominants and Submissives, in the great hierarchy of wealth and power that we call Wealth Bond*age. Come, Wade, and the whole Porter Novelli Team, let us kneel here, by this Dumpster full of garbage, signifying our common mortality where Nature meets Culture in a Community of Conscience, on the way to the Town Dump. Let us humbly confess our sins,  ask forgiveness, do our penance, and pledge to sin no more, that our souls might be healed."

I found Tutor's whole approach grotesque, not to say counter-productive. Wade is an ideal client for Values-Based Philanthropy Planning.  I would not tick him off like that by finding fault.  His immortal soul is his problem. Let's see if we can get some of his money. An extra million or two would sure make me happy.

Interview on Philanthropy with Warren Buffet

Excellent interview in Macleans with Warren Buffet on his philanthropy. To me the most interesting comment was that he judges himself through his father's eyes, that is his own internal scorecard. We may give to earn the respect of  someone who died long ago.  So family values are passed on, so artistic traditions are as well, and philosophical ones as well. 

Omidyar Point System Patent Pending

Omidyar.net had a point system for rating posts and community members. The community was owned by Omidyar LLC and was termed a gift. The patent pending on the point system is here.  The site failed, but the patent will live on, extracting a tax from who knows how many community-building efforts. 

Update:  Lucy Bernholz comments on the Omidyar patent.

Rule One of Philanthropy: "Don't Piss off The CIA"

Catherine Austin Fitts:

Several years ago, I went to California to do a speaking tour and to raise money to help me through the most difficult part of eleven years of litigation resulting from my efforts to prevent corruption in the federal finances. The speaking tour was successful. However, after spending many lunches and dinners entertaining numerous wealthy people, I came back empty handed. As one honest San Francisco Bay Area heiress said, “I would never give you money. I don’t want to piss off the CIA.”

Sound-bite explanations of who Catherine Fitts is, and what she is talking about would be inadequate. Suffice it to say that she was a Managing Director of Dillon Reid, and served as Assistant Head of HUD under Bush the Elder and also under Clinton. She became expert at tracing public, private and illegal cash flows in and out of urban neighborhoods, and in the process got close to information that would not shed a good light on our government - not the Republicans, not Democrats - but the structure they collectively manage, particularly the elements that are run with trillions of dollars that are outside any audit trail. Drug money comes into Catherine's account, as does financial fraud, as does high Wall Street finance, as do governmental goon squads. Catherine, as a move in a larger chess game, put it all on the net, on servers on foreign soil. If you have time and the stomach for it you can read all about it, laid out like a deposition. Of interest to me is that the funders Catherine describes above, going along to get along for fear of reprisal, are liberal or progressive.  Catherine is staunchly Christian and conservative, a defender not of what the free market has become, but what it was supposed to have been.  She is a conspiracy theorist in that she suggests that if you are not part of a conspiracy for the bad, you might as well start one for the good.  America is a free country, under the rule of law.  What am I leaving out?

If a true political return on investment would drive transparency in government finance, open government operations to public scrutiny, and hold politicians of both parties accountable to the law, and to the citizenry, I wonder where we would start? Who talks about these issues? Can anyone point me to a few good links?