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The Latest Legal Documents Typically Rule
When it comes to the planning that families work on to transition their assets from one generation to the next, there are lots of moving parts.
It’s not unusual for discussions to drag out over months and years, when family leaders are trying to arrange things for the future.
That isn’t necessarily a bad thing, because in my view it’s better to take your time to get it right than to rush into something that turns out to be sub-optimal.
But there’s also a danger in taking too long, or waiting too long to take care of overdue updates and revisions.
If someone important happens to die before everything is signed, you may very well be stuck with what was written the last time that agreements were actually fully executed.
The Illusion That All Is Good
Because the vast majority of people really don’t like to think about this stuff very often, there’s a tendency to delay taking action, even when you know that you really should be working on making your latest ideas and plans official.
Quite often a family will undergo weeks and months of discussions and drafting and revising and signing documents, and so when that’s finally all done, the last thing they want to do is open up that Pandora’s box again, even if several years have elapsed in the interim.
So more often than not, they continue to live under the false illusion that all is good.
Far too often, the sprint to wrap things up, and the fatigue that naturally occurs afterwards, means that few of those family members affected by these agreements actually know what’s really in them or have a good understanding of what’s to occur upon someone’s death.
The exhaustion feeling is a real thing.
“They’re Stuck with It!”
This subject came (back) onto my radar a while back during a peer call, when one experienced colleague was lamenting the fact that she often has to deal with such situations, where a family realizes that what they signed is not what they actually thought they’d agreed upon.
It’s also not what they want nor what they need.
This call was in French so I’ll give you the direct quote followed by my translation:
« Pis là, ils sont pognés avec ça! »
“And then, they’re stuck with it!”
I can’t convey her tone here, but let’s just say there was a certain amount of frustration in her voice, likely amplified by the number of times she’d experienced this (Merci AV).
So often this is the result of well-meaning professionals who were trying to do right by the family, but who, for a variety of reasons, ended up supplying “standard” documents that did not respond to the “custom” situation of the family in question.
All Good, We’ll Just Revise Them!
I noted above that this occurred a while back, and yet I’m only writing about it now, because I wasn’t sure there was enough there for a blog post until this past week.
I had the opportunity to be part of an annual forum over a couple of days with other professional who serve UHNW families in Canada.
While most of the peer groups and events I’m involved with are dominated by those who work the “family circle” around process, relationships and family dynamics, in this group I was a part of a small group of such specialists, surrounded by technical experts from the tax, trust and estates world.
The discussions we had brought this subject back into focus for me in a real way.
A Case Example Brings It Home
We were assigned into breakout groups to discuss a case loosely based on the Yellowstone TV series.
It was during my discussions with lawyers and tax specialists that it became very clear that it didn’t really matter what the family wanted, because if John died before they could get it all signed, sealed and delivered, they’d all be stuck with whatever his last will stated.
The Antithesis of “Plans Are Useless”
Back in 2019, in Plans Are Useless, Planning Is Indispensable, we looked at how important it is for families to come together to discuss and clarify what they want to happen in the future.
But unless EVERYONE agrees, they’ll be stuck with what’s written in the legal documents.
Best keep them current; but that takes work, time, and intention.
Let’s get going then.
