Family & Money with Family Legacy Guide Steve Legler

Every parent strives to teach their children the right values around money to ensure they will become responsible individuals and be able to secure their future.

But how do you start having those conversations with your children? How do you keep them grounded when they’ve grown up with wealth? When should you start talking to them about transitioning your wealth?

Whether you’re a business owner, professional, or an executive, the best time to start planning around your family and wealth is now. Author Steve Legler joins us to share his expertise around family dynamics, wealth, and successful inter-generational transitions.

Steve Legler is a family legacy guide and advisor who helps families turn their dreams into a workable plan, using a step-by-step method to get everyone on the same page and ensure that the wealth transition goes smoothly and the legacy continues.

Key Topics:

  • Introducing Steve Legler (1:01)
  • Why we created this episode for Canadian investors (2:13)
  • How Steve helps families as a Family Legacy Guide (5:45)
  • Steve’s family business background (6:53)
  • How a family office works (8:59)
  • Preparing a rising generation family group to take over a family company (11:43)
  • Steve’s thoughts on Succession (14:13)
  • Working with a rising generation family group to wind down a family business (16:09)
  • Steve’s realization that he wanted to work with business families (18:46)
  • How Steve rounded out his skill set as a family business advisor (20:48)
  • The value of personal experience (22:41)
  • How to think about teaching your kids about money (25:12)
  • Making money an acceptable topic of conversation (26:49)
  • Instilling good money values in your children (28:00)
  • Leaving your kids with as much money as they can handle (31:09)
  • The problem with withholding wealth (32:14)
  • Long-term discussions about wealth transition (35:29)
  • When to talk to your children about your will (37:38)
  • Why equal isn’t always best for dividing your wealth (39:19)
  • Why clear communication is crucial (40:14)
  • How to plan a family meeting (42:38)
  • Essential elements of discussions about inter-generational wealth transition (45:43)
  • What to think about when choosing your executors (48:29)
  • The key to good family governance (50:46)
  • Building your legacy (52:34)
  • Why respect is at the core of a successful wealth transition (54:36)

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Welcome to the Empowered investor. My name is Keith Matthews and I’m joined by my co host Ruben Antoine Rubin. How are you today?

I’m very good. What about your kid?

Fantastic and very excited about today’s show. We have Steve Legler as a guest, Rubin tell us about Steve Yes,

definitely. Steve Legler is a family coach and advisor. So when you think about an advisor you will think someone that you hire to work with your financial assets your portfolio if you have a business or advise on the business on tax savings. So Steve doesn’t, doesn’t do that, although he can. He has some technical background to navigate around this matters. His focus is mostly on the family side of things. So Steve will help families with some level of wealth to work around you know, solving conflict working on the human side. Of thing, the relationships and all this to ensure that the wealth transition goes smoothly and the legacy continues.

You’re absolutely right. Steve works on the soft side. He works on family relationships, and historically, he’s worked with families that have owned businesses, large successful businesses and are looking to transition to the next generation. And what he’s picked up in that area is this ability to understand how families think, how families work, the dynamics around that and so we asked him to do today was to really focus on a couple of key sections that we thought our listeners would really like. And so two key components Ruben that we got him to talk about, and I loved it was how to talk to your kids about money. And that was definitely one area. When do you start talking about money? And that was a great area. And then the other part was when do you start talking about transitioning your wealth regardless of whether you are a business owner or professional and executive, hardworking Canadian that saved money? When do you start talking about transition? So I thought those two areas were really very human very, very warm and very apropos for our listening

Exactly. And that’s what I found very interesting as well, because with this conversation, anyone could relate because any parents no matter the level of wealth, will be asking themselves how do they give the right values generally speaking around life but around money as well to their kids. You know how to they ensure that they raise a kid or kids that will become responsible and hardworking individuals and will be able to create their own future their own wealth, so the conversation is applicable to any families and all families.

here so right Ruben. Steve is also an expert and an author of two books. First book that he wrote with called shift your family business. And the second book that he’s written is interdependent wealth. And so clearly, he’s passionate about this field and we’re thrilled to have him as a guest.

Exactly. I read both books and they are really good. If anyone is interested. They can easily be found on Amazon, and about Steve itself. If the listeners are looking to know more about him. He can easily be found by googling his name Steve Legler. He has also a blog, Steve And of course he can be found on LinkedIn and also on Twitter.

Excellent Rubin. I’m looking forward to our discussion. Folks, please enjoy today’s show on family and wealth and joy. Welcome to the Empowered investor. Steve.

Thanks for having me. Keith. Nice to see you again. Ruben as well.

Nice to have you.

It’s amazing. Steve, you and I know each other going back 30 years when we did our MBA school together at Western who would have thought way back then that in 2021, we’d be doing a podcast together.

Well, we didn’t know what a podcast was because it didn’t exist, but I recall having a lot of laughs at your apartment that you shared with a friend of ours who was in the same study group as me and so that’s why we spent a lot of time together even though we weren’t in the same class. And that’s when I got to know you even though I knew you before I think from like John Abbott and maybe when you were working in a corner store and selling beer to people like me who weren’t maybe quite old enough to buy it but that’s five years ago, so we’ll let bygones be bygones.

That’s quite a memory. That convenience store was called Apollo.

Yeah, Apollo shop and right next to the Royal Bank. Yeah, yeah, great memory.

So listen, Steve, we have a wonderful show today. Why don’t we start by asking and you sharing with our audience exactly what you do.

Okay, no problem. My answer to that is not as simple as what most people would answer because I work in a niche of a niche. So I work with business families and family businesses and wealthy families. And I varied my title over the years from family business consultant to family legacy, coach and now I call myself a family legacy guide. Because I like to work with families and the members of the families and sometimes it’s only with one and sometimes it’s with the whole family, but in the transition of their wealth and or their business from one generation to the next. So what’s involved in that is a lot of facilitation. A lot of coaching, a lot of helping them organize meetings and figuring out their what we call family governance, which is a really scary term for a lot of families, but we’ll get into why it’s not really that scary a bit later.

So Steve, why do you do that? Can you tell us a bit about your personal journey that brought you to become a family advisor or Family Guide?

Yes, look, if you would have asked me 10 years ago, if I would be doing this, I wouldn’t have known that it existed. So I grew up in a family business and my father had started a company before I was born. I have two older sisters. And so because I was a boy and it was in the 1960s and the business was in the steel fabrication industry, I was deemed to be the proper successor and from my earliest days, that was the message that I received that my duty was to succeed my father in the business he had started and so everything I did during my years growing up, was preparing me for that and I did start working for the family business it was called try steel in Montreal here and I got my be calm at McGill. Because of course when you’re going to go into business, you have to study business, went straight into the business, which is not something I recommend now as a consultant to family businesses that you’re not supposed to hire your kids right out of school, make them go get a job somewhere else but that was deemed to be not the best thing for us. My dad knew that people said that but said we’re not going to do that. So went to work straight in the business and then went to do my MBA after three years or I met Keith and spent some time with him, came back to eventually get ready to take over this business when I was 26. And on my first day back my dad called me into his office and said, You know you’ve been gone a couple of years things have been going south. We’re gonna have to do something we’re gonna have to merge clothes, sell whatever. Long story short, six months later, we’ve gone from 250 employees to four. Wow. Two of us were named Steve Legler and I had a junior after my name, my dad had a farm he had bought for fun. He went to spend his time there and I was left. This was 1991. Now managing a very small family office, but it was 1991 Nobody knew what a family office was then most people still don’t know what it is now, but I was managing the assets. of our family.

So tell me a little bit. What does that mean family office. Steve, what’s your definition of that? And what did that entail Exactly?

Well, it essentially means I’m now in charge of a bunch of assets that the family owns. And so I’m stewarding and managing the assets. So we had some money from the sale of our operations. We had some real estate that we were to rent out and try to sell. We had some patented products that we were licensing to other people to produce products. So I was managing those different things. These are the assets owned by the family and I manage them out of that office. What family office means to other businesses if a big company sells for $50 million, and now the family no longer has an operating business, they will typically realize that what they have is still something that is worth managing in an organized way as a new kind of company that manages mostly investments, but also will manage things for the family members maybe take care of paying their income taxes, take care of managing their household staff, take care of all different things and every family office is different. And it’s a catchy term that everyone is starting to say oh yeah, that’s cool. We’re gonna be a family office. And most of the people who like to attach that moniker to their name, are in the financial asset management and they think it’ll help them attract families that have a lot of wealth. And where I come in is, it’s like, well, yes, you manage the financial wealth as the financial asset managers, but the family has a lot of other wealth, some human capital, intellectual capital, and all the family relationships. And how to steward that transition of that wealth from one generation to the next. And that’s where my specialty lies.

So that’s the niche inside a niche that you mentioned before.

Exactly. And I actually heard somebody mentioned it a couple of weeks ago on a webinar, and somebody who actually runs a large multifamily office out of Toronto, and he said, I love the analogy. It’s like there are a lot of bricks, the money than the wealth is all the bricks, but you need the mortar to hold all the bricks together to make a strong wall. And so I am a specialist in figuring out the mortar and helping the family be the ones who are actually building the wall together.

Very good analogy. So now you work as a guide and advisor and mediator facilitator for families with wealth, families on business. So can you tell us a bit more about how do you help families with wealth transition and regarding the non financial side of all what they need to care about?

I’ll give you a couple of examples from different extremes. And so I worked with a family from near Quebec City for about four years, where the parents hired me essentially to just coach their four. I won’t call them children because I use the word offspring because if you call people children, when they’re in their 20s, then you keep calling them children when they’re in their 50s It doesn’t really fit so they had four offspring, two boys and two girls, and they wanted me to work with those four people. And it was very loose in terms of what they wanted me to do, but I instinctively figured out what they were trying to do is make sure that these four siblings knew how to work together because eventually, some years down the road, these four siblings would be inheriting a whole chunk of wealth that was mostly accompanied plus some other stuff. And they wanted to make sure that those kids would learn how on their own and I said kids I caught myself would be able to work together and make decisions together and not end up having the wealth that the family owned, cause problems in the family. And so we started just having meetings and organizing events where I helped the four of them the four siblings to figure out what they wanted to do. As a family. We started working on defining their values. They started having family retreats with their spouses and their kids to which they invited their parents. Eventually we started a more formal family council where the four of them and their parents would get together and have quarterly meetings to plan things coming up in the transition. And the parents were very happy to see that here. We’re there for offspring all working together as a team and learning to get along together share responsibility, and have some you know, democratic decision making, which is the hardest thing because normally, a family will have, let’s say one Patriarch who makes all the decisions and then it goes to another generation where there’s a sibling group. So now you’re going from autocratic to democratic and that is not always an obvious transition. And it needs to be worked

a day this made me tank off TV show that you may have heard of a very good TV show called succession. Do you know about that TV show? It’s amazing. It’s a very good TV show and is exactly what you’re referring to right now.

You know, when when that show came out, I knew what it was about from you know, hearing it and I thought, you know, I don’t want to watch this. Because it’s going to be a really bad portrayal and it’s going to give people the wrong idea. Just like my sister who is a doctor said she could not watch er, because it was like there’s so many things that you see there you go. But that’s not realistic. But then I started watching it, and it is fantastic. And it is entertaining. And I can’t wait for season three. But when I tell people they should watch it, I always add the disclaimer. Please don’t watch this as this is how you should do it. In fact, it is the exact opposite of that.

Just just for a benefit get it’s a TV show about a family or were the Patriarch who is the founder of a company. It’s big congruent media conglomerate and the patriarch became ill health issues. And now you can see the whole sibling rivalry and who is going to take on the management of the company and then the paycheck is still in the picture. So there is there is some love but there’s a lot of fight between the kids as well and the kids. I mean, the offsprings

and the Father is committing every mistake that you could make in terms of, you know, promising the same thing to all the different children in different ways so that they all think that they’re the favorite and that he wants them to take over. So if ever happened, he gets hit by the proverbial beer truck. They’re all going to say, Well, dad wanted me to take over and you can guess what might happen after that.

Sounds like you’ve got a great reference point, Steve to talk to your clients and say, here’s a show that you might want to be able to watch and there’s some do’s and don’ts in there.

Well, you know when and that leads me so I teed up that I was gonna give two examples on different extremes. So that was working with a rising generation family group to help them and groom them and prepare them to eventually take over this family company. On the other extreme, I’m in the middle of a mediation with four siblings from a province west of here, and they are winding down a business that their father started and there’s all kinds of hairy things involved and all kinds of infighting and finger pointing and well, he should have done this and he didn’t tell us that. And I’m trying to mediate them, because I know that if I can’t help them get to something that they can settle on. At least one of them is going to call it a lawyer and that’s gonna light a fuse that’s gonna explode everything that’s going to make everything take much longer to settle. And the lawyers are going to make money and whatever family relationships still remain are just going to get worse. And so they believe I’m the one who can help resolve this for them and we’re getting to a deadline. And it’s way different than working with a rising generation group.

Yeah, absolutely. And you’ve got a very unique skill set, Steve to be able to have these What a pretty, I guess, tough conversation sometimes with individuals. Can you walk us through a little bit of your training and your background, but I want to start because you’re mostly working on the soft side of families and the soft side of the businesses and the teamwork and the cohesion. But that’s not how you first started because you first started with a bit of a technical background and undergrad in commerce and MBA and then what did you do after the

case? So after that, while I was managing what was a family office, I actually did my CFA chartered financial analyst, and people thought I was crazy doing that, just to manage really what was my own family money. I had married into a different business family, a woman I met at business school when you were there and their family also had a liquidity event as did mine. And I guess I thought maybe I would get to manage some of that wealth. But they had their liquidity event 20 years ago, and I haven’t been asked to manage any of that yet. So I guess that didn’t work out. But part of why I did my CFA was because, well, I said did it for defensive purposes, because when you’re managing wealth, everyone is looking for you. And they want to pitch themselves as hey, you should give me your money. I’ll manage it for you. And I knew that people might be coming to me and showing me their business card with CFA on it and say here Look, I’m a smart guy. I’m a CFA, you should trust me with your money and I want to be able to say here’s my business card. I’m also CFA, so I don’t I don’t have to listen to your BS.

Careful, Steve’s careful.

I mean, I know. And so I’ve managed wealth for a while. And then I stumbled into a program called family enterprise advisor. It was 2012. I was on LinkedIn and I saw an ad and it said, become a family enterprise advisor. So I clicked on it. And I said, I wonder what the heck this is. And a couple of months later, there wasn’t Toronto in this group of people. Most of whom were professionals who worked with business families in one way or another. So there were a lot of people from the banks, there were people from accounting firms. There were people who manage money. There were people who sell life insurance and these people all have a lot of family business clients and they were there to learn what makes family businesses tick. And I was there and I realized, you know what, I have nothing in common with any of these people in this room. But I come from a business family. So I was actually giving a lot of examples about what happens in families. And after that, like I was think we were in a third module of this. So this was a program that lasts like almost a year and there’s seven modules of two or three days. And somewhere in the third module, I said, Wait a sec. I have nothing in common with these people. But those people at the front of the room who are talking about things they do with families the work they do with families, helping prepare the rising generation helping work on the intergenerational transitions, helping with the continuity plans, helping them plan retreats and figuring out their values and their vision. I was like, wait a sec, that’s a thing. Like people do that. Oh, my God. I didn’t know that. That was like a craft or a profession or a job. And that’s when the light came on. And I said, Oh my god, I think I finally figured out what I want to be when I grow up. Now, I was 48 at the time, but better late than never. So Keith, you asked me what kind of training I did. And I have met other people who have worked in family businesses and then they decide one day I’m going to become a family business consultant. And my first question is usually okay, so what did you do to make that transition? Because I took this FBA program and on the first day, somebody told me you know what, if you really want to do this, you got to learn coaching skills. So I started doing coaching, training and coaching certification. I did facilitation, I did alternative dispute resolution. I started training myself in all these other things. And then I even did some Bowen family systems theory, studies, where I learned about family systems theory because what you see in one family you’ll see and other families as well. And there are things that are going on that most people don’t see when you look at the family as a system especially as it relates from one generation to the next and sibling rivalries and things like that. So I really tried to round out my skill set and at the same time, I realized that if I hadn’t been born into a business family, and somebody would have met me in my teens and given me some aptitude test, I never would have studied business, I would have gone into something else more like what I’m doing now. And in fact, my maternal grandmother lived with us when I was a kid up till I was about 50. She used to say to me, you should become a priest. I would laugh at her and say, Yeah, sure. And then here I was like a few years ago, and I’m at Georgetown University in Washington at the Bowen Center, where the Bowen family systems theory founded by Dr. Marie Bowen, and I’m there studying Bowen, family systems theory, and half the people in the room with me were clergy. They were rabbis and ministers. And I was like, Oh my God. My grandmother had me better pegged for what I was naturally good at, than my father but my father needed me to take over his business. My grandmother was just trying to look out for what I would be good at.

Yeah, and I assume that, you know, listening to you, Steve, there’s so much psychology behind what you do. which strikes me that that would be a huge underpinning in terms of trying to help people and help families.

And so some of the people who you would put in a group of my competitors, they are Dr. So and So PhD, and their psychologist, and they’re different than me, but also they do a lot of the same things. And I know that if at the time when my dad was running his business, and he started to think about oh, you know, I need to hire someone to help out with our family stuff. If you want to set here you should talk to this guy, Dr. So and So PhD, my dad would have said, Hey, we’re not crazy. I don’t need a shrink we’re not crazy. So in some ways, the people who are psychologists are maybe a step above me, but in other ways they might be perceived. As you know, there’s a lot of psychologists who don’t understand enough about business. And I remember going to a conference a few years ago, and somebody said, Geez, I wish all the psychologists would be financially literate. And then I realized, okay, so imagine you’re going to work with this very rich family, but you’re a psychologist and you have no business understanding at all. And you don’t know the difference between a million dollars and a billion dollars. How long are you going to last with that family? Before someone says this person doesn’t get us? Because the problem is that a family worth a million dollars as versus the ones that have family worth a billion dollars as are very different? Absolutely.

And that’s what make your background so interesting, because you got the technical background you grew up in a family on a business and who experienced a liquidity event, but at the same time, you’re interested in knowing more about the human aspect of it with all the training you’re getting. So the combination between the technical and all the human I think you’re well equipped to help families going through the same situations.

You’re so right Ruben, you’re so right. So Steve, let’s transition into the money side. So a lot of the discussion has been around helping families who own businesses transition their businesses. For the next part of this discussion. We’d like to focus on money and family just in general we have a lot of listeners who may not be business owners, but may be hardworking may be professionals may be executives may be students, different family environments. What lessons have you learned from your scenarios that you can relate when it comes to helping individuals teach the next generation down about money? So let’s even start with what can parents do to teach their teenage kids or even their younger kids about money? The

first thing I always tell people when they ask you this question is you want to have many, many short conversations about money, rather than having one very long one. So, so many families will not talk about money until all of a sudden they have to and they want to share with their family, that they’re actually much wealthier than the kids realize. And usually it’s not that much of a surprise to the kids because they know how to Google things. And they can see all the fancy cars in the driveway and know that they’re flying places on private jets and their friends are sitting in coach so they know anyway, but so just getting back to normalize talking about money at every opportunity. Especially when the kids are young. So if you’re going to McDonald’s and you’re buying the happy meal, and you can sit there after when you’re sitting in McDonald’s, which you’ll be able to do again soon. You can look at the prices of the individual items and look at the price of the Happy Meal and try and figure out well how do they make money on this and are they trying to sucker us in to buy this or does that free gift that you get really get you something? You see a billboard when you’re driving? One thing that I always say watch Dragon’s Den or Shark Tank together? Yes. And then like I would sit there with the remote and someone say we’re looking for $100,000 for 10% of our business and I’d hit pause when my kids were like nine years old and say so what’s the valuation of the business? They think their business is worth a million dollars. Wow must be a pretty good business. Let’s press play and see if we really think their business is worth a million. Just find ways to talk about money that aren’t about how much money I have or how much money I want to give you for your allowance just talking about money in general to make it an acceptable conversation. And the analogy I sometimes use is you know the talk about sex the birds and the bees between the parents and the kids for families. Where the kids grew up on a farm. It’s a much quicker discussion because they’ve seen the bulls and the cows together. So it’s a lot easier to just say, well with people it’s pretty much the same because they’ve seen it before so don’t shy away from talking about money and it’s easier to talk about money when it’s not talking about my money and your money, but just how money is made and how people spend money.

Very interesting. Yeah, that’s great. What about you know many parents from family with money. They are worried about raising kids that are humble or that stay motivated? Do you have any thoughts on how to keep kids or the next generation especially in wealthy family to keep the kids motivated, hungry and hardworking, you know, because if they are born in this situation, sometimes that can be a challenge.

Yeah, and often the parents will do some things for reasons. Let’s say a parent is absent a lot because they are working so hard, and that’s what’s allowing them to make money. And then they sort of feel like to make up for that they give their kids or buy their kids a lot of things and they’re sending kind of a wrong message and so the first thing I’d say is the most important thing to remember is kids learn by what they see, and what they see their parents doing. And so if you want to try and instill in your kids, that they should save money and they should treat money with respect, but then you go and blow a lot of money in stupid ways. They’re seeing the behavior much louder than they’re hearing what you’re saying. So you need to try to be consistent with that. Because if you’re sending mixed messages about how you treat money, and how you’re telling them, they should treat money, it’s probably not going to work out so well. So there’s the modeling aspect of how you behave. But there’s also encouraging them to go and make their own money. I know I had a paper route when I was 13. And I’m not sure why but my dad told me I should get a paper route. And I did and I know paper routes are probably not a thing anymore because nobody reads the paper and are they’re delivered by people in cars as opposed to a teenage kid with a bag over his shoulder like in my day, but encouraging the kids to go and have their own money that they make to which you don’t put any strings how you make this money. You can do what you want with it, as opposed to the allowance where you might say, well here’s an allowance but I really want you to save half of it and different people have different ways that they try to train their kids that way. Try to do it in a way that’s open and shows respect that you are letting the kids have some freedom, but also giving them some direction. And I don’t know if these apps and things are available yet in Canada, but I’ve seen commercials for some different kinds of spending cards that are in the US where you put the allowance on a card and then you get a report of what they’re spending it on and things like that. There’s some really interesting technology that’s coming along that I think is going to help families to manage and train kids and keep their finger on this whole topic we’re talking about.

Wow, fascinating response. And I think it’s something we hear all the time when we speak to our clients. All of our clients are hardworking and they’ve done well but they are very hard working and they worry about their kids. And the next generation and how do they instill that respect for money? And it is tough. You got to work hard to move forward and the price of things like real estate are astronomical right now. So parents worry about how the kids will move forward, save enough money, build enough wealth so that they can have a prosperous future as well

without the parents having to give them every correct. So this I just want to segue into a beautiful way that I heard this expressed by someone at a conference a few years ago is the parents want to leave the kids as much money as they think the kids can handle. In other words, you want to raise your kids so that if you ended up leaving them a really whole big pile of money that you wouldn’t worry that it would screw them up. And at the same time you would like to raise your kids so that even if you blew all your money, your kids would still be fine. So they can handle all of it. And they could also handle none of it because they’re raised properly and you know that they can make their own money. And if they inherited yours, they would be good stewards of that money. It’s a tricky balance to find, but it’s doable and the families do it. But it’s more about parenting than about business or anything else.

You’re right. That is a very tricky balance, but I could see why a lot of people would like to see that as a concept.

The other way that some people put that is you make a lot of money and then you don’t want your kids to screw up the job you did with the money, but then you don’t want the money to screw up your kids. Either one can screw up the other one. And so it’s a balance and it’s parenting and it’s modeling and it’s open communication around it and it’s respecting each other and not necessarily controlling your kids with money. That is something that some parents do. Oh, yes. Their peril. Like oh, well if you do this, you know I’ll give you this if you do that. And, you know, having too many strings attached to things like that can backfire more quickly than many parents realize.

And sometimes parents do that. They control their kids with money even after they’re gone right through their wheels and they’ll trust so

yes, there’s a lot of what is going on ruling from the grave. That still goes on, and it’s a tough one. But there’s a related version of that as well of families where let’s say the leading generation has a lot of wealth, and now their offspring are getting into their 40s and 50s and 60s, and they’ve known all their lives that they’re eventually going to inherit some money, but they haven’t really tasted much of it. And they know that as soon as dad passes away or mom passes away all of a sudden I’m getting a big windfall. But in the meantime, they’re waiting for it. And there’s very little transfer of any wealth in the interim. That creates a whole generation of what I like to call waiters. And I say they’re waiters, but they don’t work at a restaurant. They’re just waiting to inherit money. And when you see that in a family, and I’ve told my kids I don’t know if this ever happens with me. I’m gonna make damn sure that I’m not gonna leave you in a situation where I’m getting old, and you’re actually secretly cheering for me to hurry up and die. So you can have some money, because there are people who do that without realizing it. And sometimes it’s because they’ve had advisors who have told them you should set things up like this because you shouldn’t give your kids any money because it will screw them up. And then the person says, Well, this advisor seems pretty smart and he’s dealt a lot of people. So if he’s saying this, I should just listen to him. Well, that’s where we’re talking about financial wealth. And there’s all the other kinds of wealth and that’s why just listening to the financial experts will often give you sub optimal results for what you want.

Well, Steve, you’ve just gotten into exactly where we want to go into right now, which is we spoke about money discussions with younger kids. Let’s move into how and when should parents start discussing wealth transition, regardless of whether they’re a business owner, or let’s say to professionals to high income earning professionals who have accumulated wealth by the time they’re 5055? How should parents start discussing significant wealth with their kids?

Let’s start with a win. I think that when the youngest one is like in their early teens, and they’re reasonably mature and ready to hear about it, to start to introduce the idea that there’s going to be some topics we’re going to be talking about for the next few years as we prepare because we know we’re not going to live forever and we have some wealth and we want to make sure we transition it to you properly. So not to hurry up and say we’re going to have a meeting we’re going to share everything and download everything in one day. The best analogy for this is the light switch, keeping the kids in the dark and then all of a sudden flipping on the floodlights and blinding them is not what you want to do. You have a dimmer switch. And so you want to turn it up one little notch and start talking about the fact that hey, we have a lot of wealth and we’re going to start to figure out how we’re going to meet occasionally once in a while. We’re going to talk about how we’re going to transition it maybe we’ll have one meeting a year for the next few years. And we’re going to just start to talk about without talking about the dollar signs, but just what we expect from you, what you can expect from us, and defining how you’re planning to do that and to do it over a number of years. There’s a book written by a guy named Tom Dean’s called willing wisdom. Thomas Dean’s he’s actually Canadian. And he’s a speaker that talks about wealth and wealth transitions. And he talks about having an annual meeting every year on your birthday or some certain date and convening all your kids and talking about what’s in your will and why you’ve set it up that way. And there’s a list of questions that you should ask to know if you need to change things. So if you want a model for that, I recommend that book knowing full well that most people won’t read it and do what he says but it’s still worth reading.

On that will come about the how and when but you mentioned Well, do you have any guidance specifically or when you think it’s best? I mean, based on your own views, when a parent should be talking about the actual Well then what’s in it with our kids?

I would say probably I would suggest doing it much earlier than what most people think I might be the shoemaker with the bad shoes or whatever that expression is. I don’t know that I’ve talked to my kids enough about this but as soon as the kids are adults, so they can actually inherit things in their own name. I think you want them to have an idea of how you’ve set things up. But more importantly, to many people make a will and leave it there for decades without re adjusting it. And so I think every five years or so, if you haven’t updated your will, you should look at it because I’m willing to bet that there’s something that has changed. That will make you want to make some changes to your will because your kids have gotten older because somebody got married because somebody died and you inherited something else, because of whatever things happen. In your life that make you need to continually revisit that. And I don’t think I’ve ever met anyone who said oh, I want to update my will and what a waste of time because everything was the same and I didn’t need to do it. I don’t think that ever happens.

I’m gonna ask you a trigger question about the wheels again. So let’s say a family, many kids, should the parent treat the kids the same on the wheel. And by the same there’s always that debate between equal and equitable. So what’s your opinion on that? Should they just share everything equal or if a kid is in a better situation financially? But because that gets make some good decision? So they take this into account and give less to that kid which can feel unfair for that kid? I would like to hear your opinion on that.

Oh, absolutely. So that is a very tricky question. And my simplest answer is that equal is sometimes an easy way out. Because it’s a lot easier to do that and say, Well, I just want it to be equal, and they equate equal with fair and that’s the fairest way and in situations where all of your offspring are relatively the same and they’re equally well off and they’ve equally been part of your life and they’re, you know, then that’s fine. And in fact, it’s the easier way when things are simple, but things aren’t always simple and often, a family or the elders will be tempted to do something that’s different than equal, which is often the right thing to do. But the worst thing they can do is to do that and keep it a secret. Oh, yes. So it’s sharing the information. With the family members, so that it’s not a surprise. I saw Tom Dean’s who I mentioned a minute ago, speak one time and he said, there’s this sound that a lot of lawyers mentioned to him. That happens occasionally, when there’s a will reading so you know, that old thing you see on TV shows and movies, somebody dies, and everyone gets called into the lawyer’s office and now the lawyer is going to divulge what’s in the will. And Dean says the sound is and this is good thing. It’s a podcast because I tried to write this in a blog and you can’t do the sound as well. But the sound is that somebody goes and it’s not always what you think. So sometimes it’s, oh my god, I’m going to inherit way more than I ever expected and I don’t know what to do because this is sudden money syndrome. Or it’s I assumed I was getting a whole crapload of money. And I’m realizing I’m only getting dad’s car. And either way can elicit that same sound. And so my point is, surprises are not usually good. I think you should go for the most uneventful will reading that you can have, which means everyone already knows what’s in it. And so they can actually spend the time after you die, grieving your death as opposed to wondering what’s in the will and what they’re going to get and preparing to fight their siblings over what you’re accusing. Oh, you went and got dad to change the wills so you could get more because blah, blah, blah and he always loved you more and all that crap. I try to encourage people to do whatever they can to avoid those scenarios.

Those are great points, Steve. So let’s talk about family meetings. I know that you alluded to having them sort of on the sooner side when the individuals are young adults. But let’s get really specific. What should a family meeting maybe look like? A give you a scenario. Let’s say we have 260 year olds and they’ve got 40 year old kids. What should that meeting look like? Or pick any age category that you want?

That’s as good an age to start at as any other? And the first thing I would say is, don’t expect all the meetings to be the same and in fact, your first meeting should be more about setting the stage for future meetings. And not to go in there with a plan to have the parents download everything today to all their kids and have everything as a fit that complete. So I would say the first meeting is hey, we want to start to have a series of meetings maybe once a year, maybe every two years, maybe more frequently, depending where we talk about things like our wills and what you’re going to inherit and whatever assets we own, so that when eventually we’re not going to be around here. anymore, you’re prepared and you’ve had a say and we’ve talked about who’s going to do what and wants to do what and who’s qualified to do what and how we’re going to manage things going forward. And if you can put someone in charge of sort of organizing the next meeting and don’t leave the first meeting until you have the date. Set for the next meeting. These are just little tricks. You know, the reason I always go to the dentist when I’m forced to is because before I leave, they make me make an appointment again. Because if they left it to me to say I’m going to call and make an appointment, guess what? I wouldn’t go so it’s the same thing with setting up a family meeting. You go and you say okay, we’re gonna do this again in six months. Everyone get your calendars out and let’s put it on our calendars now. And what is the agenda? What can we talk about it this meeting, so whatever it is, it should not be dad who says here is the whole agenda and everyone will follow my agenda, and I will do 90% of the talking and you’re gonna listen, those are the worst kinds of family meetings. I lived through one of those actually, my dad called a family meeting in 1985. And it was very much that we went on a retreat, we went up to Mount Trump law, and it was Dad downloading all this because he had been told you know, you should have family meetings. What they didn’t tell him was you gotta have another one. Like a year later or whatever. So the next family meeting my dad called was in 2006. So there was like, more than 20 years in between any only calls out when because he got diagnosed with cancer. And then he realized, oh, yeah, I better start talking about this. So I don’t recommend waiting 20 years, I would do it at least every two years, preferably every year and start talking, not like you know everything, but like you want to have democratic discussions and where everyone can have a voice not necessarily a vote. The big thing is people hesitate to initiate these because they say well, if it’s mom and dad, but we have four kids, if we start saying how are we going to do this and they vote they’re going to vote us and they’re going to it’s like no I’m sorry, you can still maintain certain prerogatives of power by being the wealth owner and in the leading generation.

That’s a great idea, Steve. So give us an example. What kind of feedback should generation one look for from generation two in that kind of a meeting?

I always talk about the two things you are looking for when you’re trying to initiate discussions around the intergenerational transition. And they are alignment and engagement. So you want people to understand or try to figure out together where everyone wants to go. So you’re all going in the same direction. So you might have an idea of what you think as the parent, and it’s fine to set that as the course but it helps if you’re open to alternative of people say, Well, what if we did this instead? Or, and the other one is the engagement, that if they’re all busy with their lives and raising kids, and their say, Yeah, Mom and Dad, do whatever you want, we don’t really care and they’re not engaged at certain ages in certain places where those offspring are in their arc of life. They may not be interested in engaging in these discussions. And if that’s the case, maybe you started too young. Maybe one of them has enough money on their own, and doesn’t want to deal with their siblings who they see as waiting for mom and dad so they can inherit, like not everybody will always be ready to engage fully and you have to be prepared for different offspring to react in different ways. And that actually brings me to another rule that I have is all these meetings, everyone is invited, and nobody is obliged to come. So if there is one, black sheep of the family who says yeah, I’m not coming to that meeting. It’s like, I wish you would come please come, but we’re gonna have the meeting anyway. And then next year, when you have the meeting, and you invite that person again, hopefully, one or some of their siblings has told them Yeah, actually, the meeting was pretty good. It wasn’t just that telling us what to do. We were actually talking about things and maybe that person will start to come to the meetings. And so you have to invite everyone all the time. And if you force people to be somewhere where they don’t want to be, then there might be some unexpected consequences that you don’t like, from that person being there. So if they really insist on not wanting to be there, don’t force them.

That’s a great idea. What do you think about parents who say well, if I’ve got two kids or three kids, I need to put them all as liquidators. What would you provide us feedback there? And I know you’re not a lawyer or notary Steve, but you definitely have a lot of experience in terms of counseling family, in terms of how they should work together. What are your thoughts here?

Again, the most important thing is to not make it a surprise and not impose your will. So if you can say look, I have to appoint some liquidators. Some people say I should appoint all of you that can get like kind of hairy. And one of them might say, Oh, no, please, I don’t want to do it. Let Bob do it. Bob is obviously the best choice because he’s the oldest and he does this job and so he would be great and we trust them. At least you’ve had the discussion. And so I think sometimes people make things more complicated than they need to. And if you can have that discussion, that’s a good thing already. Just knowing that you could actually sit there with all your children and say, hey, you know, we’re redoing our wills now. You know, the notary or the lawyers. saying, you know, who are your administrators or liquidated or executives, whatever the word is, and say you don’t want we figured this was important for us to discuss as a family. And so what do you guys think? My God, chances are, you’re gonna get some kind of a clear answer. If you treat them with respect, and maybe you’ll decide it’s you and you, this brother and this sister, and maybe not that one and for whatever reason, but if they have had a say, in how that decision was made, the chances of things going well have just quadrupled. Whereas if they are appointed for whatever reasons, and one of them doesn’t want to be there, or you’re putting two people who don’t really trust each other or whatever, and now they’re forced to work together on something, then, things often don’t go the way you hoped. So have the discussion before, it’s not always an easy discussion. And people don’t like to talk about wills because they think, Oh, well, you know, I made my will and I know a guy who made his will and like a week later he died. You know, like, Give me a break. Because it’s not a cause and effect thing.

One of the things that’s obviously coming through your entire dialogue in your entire consulting practice, is this sort of strive to improve communication amongst family members.

Yeah. And so actually, I touched on the word family governance before and really the key to what family governance is, is regular communication. Regular clear, open, honest, transparent communication is what makes family governance work. And what really it is it’s answering the question, how are you going to make decisions together? How are you going to communicate? How are you going to solve problems together? Now solving problems and making decisions? One is just really a subset of the other. So how are you going to decide things? And how are you going to communicate? Because one of the most important things on decided together is knowing how to communicate. So really, everything comes down to communication. So more frequent communication is better than less frequent. More people involved in the communication is better than less people involved in the communication more transparent and clear communication is better than less transparent, and less clear communication.

That’s a good point. I have a question because we spoke about if we start from the beginning, when the wealth has been created, teaching kids about money and raising them with good values around the money and then now we touch on eventually now they are all there when the transition is happening, how to be sure that things are transparent and there’s good communication. How do the family then ensure that there is a legacy because there’s this thing in the industry where they say the first generation create and the second or the third destroy? So now how do a family ensure that that legacy continues is just about the values and the way they were grew up? Or there is other ways or other things to be thinking about to ensure it continues instead of just setting a choice and controlling everything?

This touches on actually what we were just talking about? The word engagement. And in order to actually leave a legacy, many people think that well, the secret is to make as much money as possible, because with more wealth, it’s more likely to last longer, and that will therefore be my legacy. And I always say no, it’s not just about making the pie bigger. It’s about figuring out how you’re going to share the pie. Who’s going to take care of the pie. How are the family members going to share that pie and steward that pie and make it bigger themselves? And I remember hearing a number of years ago, a presentation where somebody put this in the form of an equation and it’s really a simple equation, but it’s people plus assets equals legacy. The point being, without the people, there is no legacy. So you need to treat your offspring in a way that they will be interested in maintaining and stewarding your legacy. So if you are not a very nice parent and you make a lot of money and you give millions of dollars to a hospital to put your name on it, chances are 20 years after you’re dead maybe that name is still on the hospital, but people have forgotten who you were and why it was important. Whereas if your family members continue to build on your legacy, and grow the capital and transition it again to the next generation, then the chances are that your legacy will continue. Wow, this is great.

That’s a great point, Steve. We’re gonna start wrapping up here. But this has been a fabulous discussion on money and family money and kids wealth transition. If you were to think of one main takeaway point for the listeners, one thing that they should grasp on to about this discussion, one recommendation, what would that be Steve on this particular subject matter?

It’s all about how you treat your kids. If you treat them with respect, and with confidence and believing what they can do, and encourage them to do their best and raise them as proper, responsible, productive adults, you will most likely be fine. It’s all of these things. If however, you choose to be very controlling and trying to control them with money and not trusting them and second guessing them and always giving them things but with strings attached and telling them what they should do because you know best and you know better than them, then you’re setting yourself up for some more problems where those children of yours know that the odds are on their side that they will outlive you and and they will be secretly cheering for you to hurry up and get out of their way so they can do what they want. So if you can set things up so that they are doing things that they want and hopefully you can be helping them do that and not just funding everything they want, but helping them build something where you can be a guide and an experienced person and a partner for them. And you’re helping them to self actualize in a way that they want as opposed to a way that you have insisted you need to go and go to this kind of a school and then you need to do this. That doesn’t often work out the way the parents plan so trust your kids. Encourage your kids, encourage them to develop, try to stay out of their way a little bit. And they will probably be very thankful for that. And as someone who had my career plan drawn out for me, I speak from experience that that was not really what would have been best for me. I think I’ve adjusted okay. And I think some of the things I learned from the way I was raised have helped me to raise my kids in ways that I think they’re off to a really good start to

Steve, you’re doing amazing. We know you’re helping lots of families and lots of people. Thank you so much for taking the time out of your busy schedule to be with us. And so on behalf of Rubin, myself and all our listeners, thank you so much Steve Legler for being on the show.

Thanks for having me. I hope that you found some of this stuff. useful, and hopefully entertaining at the same time.

You’ve been listening to the Empowered investor podcast hosted by Keith Matthews, please visit TMA dash to subscribe to this podcast. Learn more about how his firm helps Canadian investors or to request a complimentary copy of the Empowered investor. Investments and investing strategy should be evaluated based on your own objectives. Listeners of this podcast should use their best judgment and consult a financial expert prior to making any investment decisions based on the information found in this podcast.

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