Does your wealth plan consider and
strengthen your important relationships?

Why a strong wealth plan should balance tactical planning tools with emotional bonds

In every life, there is the rational, and the emotional. Like a mirror, wealth planning reflects this diversity.

At one end, we have tangible assets that need meticulous legal and financial arrangements. At the other, we have the complex fabric of human relationships.

The wealth planning journey must balance both rational components and emotional layers. Ultimately, it should aim for an approach that respects and preserves the reciprocity between wealth and relationships, aligned with a wealth owner’s priorities.

 

The skeleton, the flesh, and the blood

Of course, the technical side of wealth planning is crucial.

Legal structures and financial planning tools safeguard assets, facilitating the seamless transition of wealth across generations. They provide efficiencies, protect against potential liabilities, and help manage risks.

For example: a successful entrepreneur approaching a liquidity event might strategize to preserve substantial wealth, and enrich future generations. In this instance, structures and tools are essential.

But wealth isn’t entirely quantifiable: it is always more than a collection of assets. Wealth embodies a family’s shared history, aspirations, and values.

Planning should never lose sight of the emotional and relational aspects involved. If the technical side of wealth planning represents the skeleton, the relational aspects are the flesh and blood: they breathe life into the process.

 

An act of balance

Ignoring these aspects might preserve wealth in the short-term. But at what cost to family harmony and emotional fulfilment?

Consider a relocation decision, for example.

Consider an entrepreneur who, for the sake of their business, moves their family to a different country – leaving the children feeling detached from their friends, and placing burden on the spouse to provide extra support.

This decision may achieve financial savings – but what about the social and emotional cost?

The impact of such decisions can be wide-ranging, causing individuals a sense of loss and disconnect. In these moments, the imbalance between technical and relational aspects is stark.

Wealth – intertwined with life’s complexities – can be a resource to fulfil desires, and secure futures. It can also symbolise conflicts, control, and power struggles. Balancing wealth preservation with maintaining healthy relationships is key.

The crux of this balancing act is to consciously consider what wealth planning means for your relationships. A balanced plan will always prioritise tangible and intangible elements – considering emotional, social, and financial outcomes.

This could involve open family dialogues on wealth transition. Or preparing the next generation for their inheritance, and including family members in key decisions.

 

In harmony and balance

Wealth planning transcends beyond boardrooms and legal documents. It reaches into family life, personal aspirations, and shared values. It recognises relationships are integral to the process – they are not an adjunct.

Remember: a meaningful legacy isn’t just about how much wealth you leave behind. It includes the emotional and relational resonance attached to that wealth.

By balancing technicalities with relationships, families can cultivate a legacy that values both material prosperity and emotional connections – guiding future generations to become responsible stewards of both.

This approach is at the heart of the Conduct Formula. It acknowledges that wealth planning significantly affects family harmony and balance. It encourages decisions that consider both financial technicalities and emotional wellbeing.

The formula emphasises conscious choice, balances wealth creation and preservation with the maintenance of healthy, supportive relationships.

Four questions to achieve a balanced wealth plan

  1. Are you properly considering the impact of your wealth planning decisions on your personal, family, and business relationships?
  2. In the pursuit of wealth creation and preservation, are there unintentional sacrifices you or your family are making? How might these be addressed?
  3. Are you involving family members in wealth planning decisions? How might their involvement shape your planning process and its outcomes?
  4. Are there specific life changes or business milestones on the horizon (like an important transaction) that might warrant re-evaluating your current approach to wealth planning?