People say that planning is all about the inevitable: death and taxes. In reality, that’s not correct. It’s about a family’s legacy, both the monetary gifts and the ethical values. If one can successfully plan for both, then one has created a legacy worth shouting about.
So, people make a great mistake when they assume that our business is just about taxes, money and death and that it is morose as the three words in the title imply. While it’s true that these are aspects of the business we’re in, it’s far from the complete picture.
We very deliberately choose the word “legacy” in describing what we do because this is about so much more than material assets. This is about Generation 1’s (the parents, for our purposes) wishes taking shape and form in both the here and now and in the future. You may not be here forever, but that doesn’t mean your planning and desires aren’t. In a sense, we help you to live on.
The things that live on as part of your legacy are all the attributes that make you the person who you are today: your ethics, your values, your morals. While we would never advocate the idea of creating a copying machine of one human template, we have learned during our years in business and through the many clients with whom we have interacted that they want something more of themselves to be in place from generation to generation, and not only the next generation. People generally accept that their children, grandchildren, or other heirs aren’t simply a copy of themselves, and they like that all of these descendants have distinct personalities, but they more than appreciate when attributes like a work ethic or a high degree of morality are ever present in succeeding generations.
There are people who structure an inheritance so that it mandates that heirs who inherit a substantial sum must not merely have a job but have a career; or heirs or heiresses must have been married by a certain age and to a member of the same faith; or treating a financial windfall with respect and not blowing it frivolously at the local Porsche dealership. These estates are structured so that if these terms are not followed, and if they are litigated, the heirs could get nothing or a reduced inheritance. (These are called in terrorem clauses, and they’re not honored in all states.) The idea isn’t to control someone’s life fully, but rather to infuse in the ensuing generations the same strong feelings of Generation 1. Worse, if Generations 2 (the children) and 3 (the grandchildren) don’t take to heart Generation 1’s ideals and concepts and end up being disinherited or their inheritance being doled out by a trustee, they’ll feel cheated that they didn’t receive what they “deserved”.
We have helped clients to build structures into their plans, to navigate these treacherous generational waters. We have also helped Generations 1 and 2 create and fund appropriate methodologies to create smooth and tax efficient asset transfers. We believe that taking a holistic approach that incorporates these ideas into an estate plan is a healthy and important component of leaving assets to future generations and providing our clients with the real composite legacy they want. Future generations who barely knew Generation 1 will get to know them through the ethics and values they communicate in addition to Generation 1’s largess.
The Unger Company Ltd. has more than five decades of experience helping high net worth and ultra-high net worth clients to formulate and execute efficient strategies. If you or someone you represent are in need of insightful planning for a large estate, please call us at 212-755-4777 or contact us here.