S3 E2 – Aging Parents, Family Transitions, and Sudden Loss ft. Steve Legler

Speaker 2 0:35
Welcome back to the Our Family Office podcast. I’m your host Pat Fish. This season, we’re asking the question: Who needs a family office? Our theme this week is aging parents, family transitions, and the sudden loss of a wealth creator. My guest this week is Steve Legler, an independent family legacy coach with Blackwood Family Enterprise Services. In this episode, Steve and I discuss why families postpone important conversations about succession and decision making, the risks of having information concentrated in one person’s head, and how spouses and future generations can be better prepared for periods of transition. I hope you enjoy it. Steve, thanks so much for being here.

Speaker 1 1:18
Glad to be here. I’m ready to get going.

Speaker 2 1:22
So maybe to start, you can just tell the listeners a little bit about your practice and the work that you do with wealthy families.

Speaker 1 1:31
Yeah, I stumbled into this work back in 2013. I did the FEA program through Family Enterprise Canada, and I I really stumbled into it in that I I come from my own family business which we had a liquidity event and I was running our small family office and then I had a calling during this program I didn’t realize that working with families on this family stuff was actually a thing and so I’ve been doing this now for almost a decade and a half. I kind of like to talk about it more recently as, in general, helping families have the conversations that they know they need to be having, but that left to themselves they’re unlikely to have or have difficulty getting them started, yeah, and sort of just working with families to talk about the family aspect of everything. They have a lot of advisors already who help them structure things and things and invest the money and save taxes and all that stuff is wonderful and necessary, and it is often insufficient, and many families get to the point where all of a sudden they realize, “Oh, we need help with some of this stuff. We don’t know how to do it.” And my my biggest lamentation about this work is that there’s a huge need for it, and yet there is not necessarily a lot of demand because people don’t know that we exist. Yeah. Anytime I get invited anywhere to talk about it, I love to to share about it, to have some awareness out there, so that families who might have this need realize that there’s a place where they can find the resource they their family, whether it’s me, whether it’s Blackwood, whether it’s someone else. I know lots of people who do this work, and we all have that same sort of thing. Is like, not enough people know we exist.

Speaker 2 3:27
Yeah, and I think you’re in such a great position to speak about what I wanted to talk about today, which is you know the the theme of this season is who needs a family office, who needs a trusted advisor to help them through a difficult situation, and what I wanted to talk about today was aging parents or or having lost parents, you know, a patriarch or matriarch, a wealth creator in in many cases, and either they are getting to the point of being unable to continue to handle everything themselves, or not really wanting to, or you could have a sudden loss of that person. Sure, and and what that transition does. So, in your experience, what does that look like? What are the circumstances that lead to families in those positions to start to say, “Hey, we might need more help than we’re used to getting.”

Speaker 1 4:32
Good question. And often, the now generation who are in charge are not as proactive as we would like them to be in in initiating what needs to happen, right? So it it occurs with some regularity that the rising gen could see that hey this can’t keep going on this way and now I need some answers I need to prepare, but that are often you know told don’t don’t worry about it. Dad’s got this and all that, and so often it comes from the rising gen a request to hey can you help me speak with my parents? Right, that is often an entry point for people like us. It’s it’s always nice when the now Jen realizes it and wants to get out in front of it. I wish that would happen more because it’s a little bit easier. Like the entry point where we come into a family, whether it’s top down, that’s usually an easier sell to the rest of the family. Sometimes when it’s the rising gen that that calls us, and we have to then convince their parents. That’s a little bit of a harder sell, but it’s not impossible because they just they need someone who’s not related to them to explain to them the importance of getting these conversations started, because the earlier you start, the more good options you have.

Speaker 2 6:06
Right, and what is it you think about the wealth creators that makes it so difficult for them to step back? Is it concern about readiness? Is it just difficulty giving up control? Is it maybe all the above?

Speaker 1 6:20
It’s both of those. The they are not ready is often an easy cop out for I’m not ready to let go. And there’s another aspect. It’s the there’s the control, and there’s also the it’s not just the control. It’s the identity. It’s the if I’m not doing this and I’m no longer the head of this company or the CEO or whatever, who am I and what do I become? And then that brings in the whole mortality thing that nobody wants to talk.

Speaker 2 6:56
Right. Sure. Yeah. And do you think that the do you think the difficulty is having the conversations around kind of estate planning, and because it is about mortality, or is the difficulty more based around transition of control of family assets, family business, that sort of thing?

Speaker 1 7:20
I think it’s usually more the control of the decision making, like because the estate planning can get framed very easy a lot more easily as look we’re just doing these documents now for someday well into the future when you when you just might die, right? But in between you can just keep doing what you’re doing because that’s what most people want to do is just keep doing what they’re doing, and they won’t change what they’re doing until the pain point is large enough that they realize they should. Now, I like to think that there’s a switch in in everybody’s head that that eventually says you know, okay, I need to stop worrying about making the pie bigger, and start to worry about how this pie is going to go from my generation to the next one. But that switch doesn’t always flip, and sometimes it flips a lot later. And interestingly, it seems that for the wealth creators, the G ones, it’s those are the hardest ones to deal with because this has been their life. This is, you know, they might have three kids, but they feel like they have four, and the favorite one is the is the is business, and so getting them out of that mode, Sometimes more difficult than we would like it to be, and the hardest people to sell that to those people are their kids, because they’re always perceived as yeah you want me to get out of the way so you could so that’s why bringing in an outside trusted advisor, who has had that conversation before? Who can relate to them about other families with and depersonalize it and not have it? Oh, my kids are coming for me. Right. That’s usually why people reach out to us to help them to have those conversations.

Speaker 2 9:19
Yeah. And what do you see as the the danger of having it all in one person’s head? I mean, there’s the obvious of the logistical. Hey, if they get hit by a bus tomorrow, who runs the business? But I do think that there’s the risks of it go deeper than that.

Speaker 1 9:40
Well, yes, and I mean the simplest view of that is a a patriarch who dies, and now everything in the will goes to mom, and mom has had zero preparation, and her whole life has always said, “Well, I don’t take care of that. Your father takes care of that.”

Speaker 2 9:58
Right,

Speaker 1 9:59
and now she ends up in a situation dealing with things she is completely unprepared for, and whereas maybe Dad was able to tap down the kids and their requests or demands or whatever, Mom is very less likely to be in that situation and is going to be more easily swayed by perhaps one child versus another, and that opens up a whole new bunch of things. So preparing the whole family as a family for what is coming. The family owns this wealth. The wealth is hoped for and expected to be maintained within this family, going forward, it was from one household, and now it might be four or five households. Stuff has to be figured out of who’s deciding what, who was allowed to have what under what circumstances, how are the different needs of each family going to be handled, and that that’s a lot easier to do upstream than downstream.

Speaker 2 11:04
Yeah, I think so much of it, and the idea that you’ve kind of alluded to is preventing role confusion, right? This idea of as exactly as you said of who’s going to do what, and I think you’re much less likely to have confusion if you’re able to sit down as a family and say, “Here’s what I think should happen, and here’s why,” and everyone hears that message, and it’s then much harder later to say, “No, I should be doing this,” and it’s like, “Well, wait a second. We all sat in the room together, and we all heard mom or dad say, “I think you should do A, B, and C, and here’s the reasons why.” So now you’re saying you want to do X, Y, Z, but you didn’t raise it when we had the conversation, so we’re not getting into that now.

Speaker 1 11:56
Well, and so it’s yeah, you talked about earlier about preparation, but there’s also the roles and capabilities, and different people in the family have different abilities, and if it’s not clear before someone exits the family what is who’s supposed to take over different roles, you’re opening up a whole bunch of possible arguments and perhaps lawsuits going forward, and that’s why we always try to. One of the things I’m always doing, and at Blackwood, we’re usually almost always trying to get families into some regular rhythm of family meetings, whether it be once a year, once a quarter, whatever it is, whatever makes sense for that family, and sometimes it’s a few more on the front end to get things organized, and then you can go to an annual one. But to clarify some of these, and you know, family governance that people don’t like that term, and so we usually talk about you know decision making, communication, and problem solving, and figuring out who’s going to decide what, and if you put the rest of the family in the room together for the first time after a funeral to say now let’s start to figure out who’s going to decide what, your result is not going to be as good or harmonious as if you had started to have those meetings 12345 years in advance to get people used to how are we together? How do we decide things together? Can we do this on our own? Do we need an outside facilitator to help these meetings go well and be productive? Yeah, and that’s the realization that oftentimes, like my dad called a family meeting in 1985 because he had heard. Well, he was a member of cafe. You need to have family meetings. He heard that part. He didn’t hear the part about having an outside facilitator there. Okay. So the meeting was not wonderful, and then he didn’t even dare try to call one until 2006. And 21 years between family meetings is not the recommended interval, and that meeting only happened because he was diagnosed with cancer. Right, so I have lived this. I know what happens when you don’t have these meetings. My dad died 17 years ago. I now have the family meetings with my sisters and my mother, and we have someone who’s not who has a different last name sit there and run the meetings for us because that’s a better way to do it. Yeah, because that’s that is how most families who do this well have some version of doing it that way, and you don’t just wake up one morning and say, “Okay, well, I’m going to do this,” and then have it running like it takes a certain number of meetings before the family even understands the process of it or why they’re doing it. And at the beginning, it’s sometimes hard, and they don’t get it. But after a while, it becomes, I know that there will be a place for me to bring up this question or raise this issue with the family, because the work, the biggest problem most families have is people have they’re left in the dark and they make assumptions and they make stuff up what they think is going to happen and a lot of it might be wrong and then when it comes time to discuss it, you know now you’re starting with a big mess. So so if you have a regular cadence of meetings where people come and they know this is the one day a quarter or a year we talk about these subjects of how our family wealth affects our family. So this is if I have a question and I know there’s a meeting coming up, I can suggest to the person who’s creating the agenda, hey, can we make sure we set up set aside some time to talk about this, and that that’s an acceptable subject to talk about, as opposed to a taboo subject that is no dad’s going to keep doing that until forever, and then we’ll figure it out later when he’s gone.

Speaker 2 15:54
Or, or like you said, you don’t know when the right time, right? You want to bring it up, and it’s like it’s the holidays. We’re not going to talk about that now. Okay. Well, when are we going to talk about it? And then it just never gets discussed, right? Because you don’t have that venue.

Speaker 1 16:08
Then you have the person, the patriarch or the parents, who know that they have to do this, and they want to they want to rip off the band aid and have one big meeting where they share everything and never go near this again. Yeah, and I understand the temptation to do that, and I often spend a lot of time convincing people that that is not the best way to do it, and that they should instead of so the dimmer switch analogy of if your kids are in the dark, you know, opening all the floodlights and blinding them is not necessarily the best way to have good results. And if you can just take the dimmer switch and turn on a bit of light and share a little bit and see how they let their eyes adjust to the light, and then come back three months or a year later and turn it up a little bit more and share a little bit more, and have people gradually acclimate themselves to their reality, and learn about it, and learn to speak to each other about it. Now you have the makings of a much better result than some big reveal, or you know, the reading of the will in the lawyer’s office, and the what comes out of those,

Speaker 2 17:21
right? I want to go back to something that you said a couple minutes ago when you were talking about the spouse, kind of all of a sudden being put in a position to make decisions and kind of maybe adjudicate disputes between their kids, that kind of thing. Yeah. What are the biggest challenges when you have a spouse who really hasn’t been involved in decision making, and what are what are the things that you see most commonly are things that that spouse wishes they would have gotten brought in on or gotten some information about earlier.

Speaker 1 18:00
So my mother’s 89, and I think that generation really what they needed was just to know before my dad died. Her thing was I just need to know who to trust, right? Yeah, I’m not I’m not going to learn it now, but if you tell me who to trust, and a lot of cases, that’s still the case. I like to think that there’s less of that, you know, the stay-at-home mom who never was involved in anything, but just recognizing that they will be in that position, perhaps where they are now having to make decisions not just about where to invest the money, where they can easily find advice for people like you of how to make sure that the money doesn’t dissipate because of poor investment decisions or tax planning, but who’s going to help them with the family part of oh one of my kids just came and said oh by the way you know something happened and can you write me a check for 100 grand and by the way, please don’t tell my brother. That becomes a real slippery slope that I think most parents would not want to find themselves in. So having those conversations early about who’s going to decide these things, and it’s not the same for every family. It’s not like okay, just tell me what the playbook says. It is very different with every family, and every family has to sort of figure it out for themselves. Yeah, there’s no, there’s no. Here’s the template. This is what you do. Although, you know, people like that in that situation will go. They might go to their lawyer or their accountant and say, “Hey, this is happening. What should I do? And they will get an answer from these professionals whose job it is to give answers because they’re the expert. But whether that advice that they are getting in that time and place for their particular situation is the right advice for their family, and how that decision gets communicated to the family. These are there’s a lot of nuance in there where things, even if some accountant or lawyer gives you good advice on how to respond, how that is delivered to the family system and absorbed can have all kinds of repercussions going forward if it’s not handled in a in the proper way, let’s just say.

Speaker 2 20:26
Yeah, and that’s where I think when, and I’m sure you’ve had this experience as well, is when clients come in and kind of the wealth creator comes in and is saying how things are going to be and wanting to be oh don’t worry like you know my spouse doesn’t need to be in this meeting my kids don’t need to be oh boy and it’s very early on it’s us educating them and making clear of hey if you’re just looking for wealth management like that’s a different role and that’s fine and there’s lots of people that do that very well but if you’re looking for to build a relationship with a trusted advisor, or you know, if you’re if you’re looking for a family office, then that’s not really how this relationship goes.

Speaker 1 21:12
No, and it might be fine to say here, yeah, we’ll do the first meeting with just you, but eventually there will be other members of your family sitting around the table with us, and if you’re not ready for that, or you think that doesn’t make sense, then you should probably look somewhere else.

Speaker 2 21:27
Yeah, that that’s exactly it. Let’s talk about sudden loss. So, families always think there’s going to be time to prepare, and sometimes there is, and unfortunately, sometimes there isn’t. What have you seen in situations where a loss has been sudden, where families have really struggled to kind of moor themselves, where you know maybe the grief process has to some extent, kind of derailed the decision-making process about the family wealth and those kinds of things.

Speaker 1 22:08
Yeah, that that suddenness of something, whether it’s a loss of a person or even you know, just think of the other side of it. The lottery winners, people say, you know, put the check in the bank, and then go on a trip for six months, and don’t do anything. Do that thing short term. You’re still you’re still adjusting, and that’s the downside of not doing any work in advance is that the grief will get in the way, and that’s exactly when the trusted people, so the trusted non-family members who may be grieving a little bit, but not to the extent of the family members. So, if you’re thinking about an operating company, like and then dad was the CEO and he dies, usually there are there’s you know some management team that keeps the business going. Now, when it’s only liquid wealth, hopefully the people in the family office who are running the money will make sure that that continues. But it’s all the other stuff we’ve been talking about is the other decisions about who gets what and who gets to decide what, and then how does the legality of all this happen? Like you have these very wealthy families, where now the some the person in control passes away, and the beneficiaries are all okay. So where’s my check? Right, and it might be one year, two years, three years before everything goes through all the government and the tax filings, and all that, and that can be a heck of a surprise to people who have unfortunately been kind of waiting for someone to pass away. And I always, you know, I’ve said to my kids for years, I don’t know what I’m going to do, but I’m going to make sure I arrange my things so if when I’m getting old, you’re not secretly wishing for me to hurry up and die because I have seen families where that happens, and it is it is it is not it is not good, and so. But unfortunately, there are some families, some family leaders, who conduct themselves and parent their kids in such a way that that unfortunately is a side effect, whether it’s named or not. Yeah, trying to get people to change the way they relate to their next generation, so as not to have that happen, is one of the hardest conversations that I have to have with people who are senior to me, and I know because I talk to all members of the family what the perceptions are, and having someone to help the family have those conversations and make those things better is a valuable resource if they if they’re aware enough to look for it. Yeah, and

Speaker 2 24:59
unfortunately, a lot of those challenges are wrapped up in decades of pre-existing family dynamics and you know existing ideas about the next generation and their abilities and their readiness and all of that stuff.

Speaker 1 25:20
All that stuff that is very hard to talk about, and so it doesn’t get talked about until someone makes the conscious decision that you know we have to do this, and hopefully surrounds themselves with some caring, experienced, impartial, neutral third parties who are used to having helping families have these conversations,

Speaker 2 25:43
and you and I know that in this business, the answer to this is really going to be it depends. But I’m going to ask anyway. For a you know wealth creator, a first generation who’s maybe hearing this conversation, what are some of the signs that they can look at to indicate that that next generation might be ready, or maybe more ready than they think they are?

Speaker 1 26:13
Oh, I like the way you frame that because it presumes that they’re actually looking at this question and trying to assess it because then you have a chance if they’re actually looking at it and saying so the quality of the conversations between the generations is a huge indicator and if they’re even able to talk about it they’re off to a good start. If they’re not able, if any time a question is asked, or something is said and it’s not understood and it’s dismissed as oh my god this is never going to work, those are indicators of a problem. But if there’s if there’s just any ability to sort of start to have a conversation about hey you know we just invested in something would you like to hear about it and like just the openness of being able to talk about wealth in a safe way yeah we have wealth this is how we manage some of it this is how we’d like some of it to be used when we’re no longer just to be able to have those conversations because most families have difficulty or not most a lot of families they can’t even talk about it and that’s the biggest danger sign so if you are able to have it to start to have some conversations and again I wouldn’t, you know, go from nothing to starting to have huge, big reveal conversations, but engaging people in discussions about it. And it might not be all the kids; it might be just one of them at a time, just to see how that goes. But to, but to prove to yourselves that as a family, we can talk about this stuff, and we need to talk about it, and we can start to talk about it, and then maybe if we need help later to have deeper conversations or to explain things that are more complex, then we can reach out to our trusted advisors to help us have those conversations as well.

Speaker 2 28:17
Yeah, and I think you’ve covered this in a couple of different ways, but kind of as a final question, which what conversations do you think more families should be having earlier than they think they maybe need to be having them?

Speaker 1 28:38
A simple conversation that acknowledges the fact that mom and dad won’t be here forever. If they can broach that subject and say, “Look, we we we’re not planning on going anywhere for a long time, but we know that someday we won’t be here, and we’d love for when we’re no longer here for what we’ve worked for to continue, and we’re not going to figure this out in over a weekend. Yeah, but if we could find a way to start to talk about this with each of you separately, with all of you together eventually, just to be able to acknowledge the reality that someday I usually frame it as you know someday many many decades from now when you guys aren’t here these people will be sitting around together and you want them to be able to still get along with each other and have the wealth still be owned by the family and being productive and used as a blessing and not a curse. Yep. How do we start to learn to talk about these things together as a family? And it’s easier for them to start to do it when mom and dad are still there, as we’ve been talking about it. So that when they are no longer there, they’ve had some practice and they know how they react around these subjects as a group.

peaker 2 30:02
yeah. No, I think that’s great advice, and you know you hope that then that leads to as you said maybe regular meetings, ideally maybe further definition of when you talk about we’d like the wealth to continue. Well, what does continuing look like from our perspective, from your perspective, you know, from as the next generation, what does that maybe look like? What are the values that are going to help guide how we make these decisions? Right. You hope that eventually it gets to all that, but I think the answer you gave is really a great place to start. Thanks so much, Steve, for sharing your insights. It’s really appreciated. Where can listeners go to learn more about you and your practice?

Speaker 1 30:51
So, Blackwood Family Enterprise Services is the firm that I work with. We have advisors across Canada, and I have a lot of content on the web, just under my name, Steve Legler, Steve legler.com. You can find me on LinkedIn. Always happy to talk about these subjects with people like you and people who listen to this and are intrigued. Happy to have an introductory conversation and help any family out there find the resources that that they need at whatever time that is, whether it’s me or someone else. I know a lot of people in this industry, and if you have a particular need for something, I can usually help plug you into someone who can be helpful for you.

Speaker 2 31:37
That’s great. Thanks again, Steve.

Speaker 1 31:38
All right. Thanks, Al.

Speaker 2 31:40
Thank you so much for listening. Our Family Office is Canada’s first purpose-built shared family office, and the Our Family Office podcast is produced by Henry Shu. Please visit ourfamilyoffice.ca for more information about our firm, and don’t forget to rate, review, and subscribe so you don’t miss an episode. And of course, share it with your family. See you next time. The information in this podcast is presented as a general educational and informational resource only. While certain participants in this podcast may be registered to provide investment advice as a representative of Our Family Office Inc., itself a registered firm in certain Canadian jurisdictions, this podcast does not provide individualized investment, financial planning, legal, tax, or insurance advice, nor is it meant as a recommendation to any listener to buy or sell any specific securities or otherwise take any other investment action. Any action you may take as a result of the information presented in this podcast is your own responsibility. Our Family Office Inc. and each of its representatives that participate in any podcast disclaim that any listener should rely in any way on any of this content as investment, tax, legal, or insurance advice, listeners are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions.

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