Personal Finance

Winnipeg Free Press - PRINT EDITION

Getting, giving, inheriting

Some simple rules for avoiding family money fights

By: Joel Schlesinger

Posted: 03/26/2011 1:00 AM | Comments: 0 (including replies)

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(COLUMBIA STATE)

Talk about philanthropy

Kaizen 2011 is a philanthropic planning conference put on by the Canadian Association of Gift Planners (CAGP), Manitoba Roundtable and Inspiring Giving Through Enlightened Planning.

When: April 7 and 8

Where: Delta Winnipeg ballroom, 350 St. Mary Ave.

Local expert speakers: Legal -- Leilani Kagan, Jennifer Pfuetzner, Peter Glowacki and Melissa Malden; financial and tax professionals --Trish DeWayne Osborn and Patrick O'Connor; ethics -- professor Arthur Schafer; fundraising professionals -- Norm Velnes, Leslie Weir, Beth Proven, Liz Kovach, Derek McLean and Allison Kesler.

Featured speakers

-- Dr. Sergio Carvalho is an F. Ross Johnson Research Fellow and associate professor of marketing at the University of Manitoba's I.H. Asper School of Business. Carvalho is an expert in consumer behaviour, investigating how the way we see ourselves influences our empathy and the way we respond to community-centred and charitable campaigns launched by corporations.

-- Frank Minton is a renowned expert on planned-giving strategies, having served as director for many fundraising arms of post-secondary education institutions in the United States, including Northwestern University. A frequent expert speaker at philanthropic seminars, he is also the principal author of Charitable Gift Annuities: The Complete Resource Manual, and is co-author of Planned Giving for Canadians.

-- Dr. Jim Grubman is a psychologist and wealth-planning consultant who has more than 15 years' experience in helping high-net-worth families overcome challenges arising from potential conflicts over finances. A world-renowned expert in the psychology of wealth, he has been featured on CNBC, Conde Nast's Portfolio.com and Business Week.

-- Local, well-known philanthropists will also be speaking at the conference, including Larry Vickar of Vickar Community Chev Olds, Abdo El Tassi, president of Peerless Garments, Tom Bryk, CEO of Cambrian Credit Union and Charles Loewen, director of the Loewen Foundation.

The conference will host the annual Friends of CAGP Manitoba award luncheon April 8 at the Delta. The event will recognize the Great-West Life Assurance Co. for corporate contributions to charitable work, and DeWayne Osborn, an expert on charitable giving at Lawton Partners in Winnipeg, for individual work.

For more information on the luncheon and conference, or to register, go to Kaizenonline.ca or call Lise at (204) 832-1512.

Wealthy families in bitter battles over inheritance money are a familiar archetype in our money-centric society.

Those well-publicized spats between siblings over a patriarch's financial remains are juicy discussion topics that evoke in those of us of lesser means a sense of schadenfreude (that's German for taking pleasure from others' misfortune).

But family cash disputes are not unique to the rich. Everyone has been embroiled in an argument about it with their loved ones at some point.

But for every well-publicized internecine trust-fund tussle, there are hundreds of wealthy families -- and many more middle-class ones -- who transfer assets from one generation to the next just fine.

That doesn't mean it's an easy process, says a Winnipeg-based wealth consultant. In reality, it's a heck of a lot of work.

"What I find all too often is there is a lot of conflict with families when they put wills together," says Patrick O'Connor, with Blackwood Wealth Planning in Winnipeg.

Perhaps the most contentious of all decisions, he says, is choosing how much money to leave to children versus charities.

"It's the elephant in the room," O'Connor says. "It's often very difficult for clients to choose between what is an appropriate inheritance for their children and the standard default of equal shares to all children."

O'Connor should know. Besides being a chartered financial consultant who specializes in helping families plan passing wealth from one generation to the next, he is chairman of a conference on philanthropy in Winnipeg next month.

Kaizen 2011, April 7 and 8 at the Delta Winnipeg, is an annual meeting of the Canadian Association of Gift Planners.

As its Japanese name indicates, it's aimed at helping experts in the field of philanthropy -- lawyers, planners, fundraisers and accountants -- help their clients.

The convention will feature several expert speakers, including some of Winnipeg's most notable philanthropists, such Charles Loewen, director of the Loewen Foundation.

One of the more notable experts is a Boston-based therapist who specializes in helping wealthy families -- among the most affluent in the United States -- overcome squabbles about their riches.

Dr. Jim Grubman is a psychologist and family wealth consultant, who also teaches about the many dynamics involved in money and family relations at McCallum Graduate School of Business at Bentley University in Waltham, Mass.

Grubman says all families, regardless of their level of affluence, can build two basic but often overlooked foundations to foster healthy money relationships, particularly when it comes to divvying up their wealth among family members and charities.

The first is communication.

"People just simply don't talk about money enough in families because they either feel it's dirty or it's a secret," he says.

Part of the problem is there isn't enough positive "modelling" when it comes to talking about money openly.

"What we usually see is people talking about money in very unhealthy ways," he says. "People are bragging like we see on reality-TV shows."

An open discussion among family members, though not easy at first, can be a rewarding experience, Grubman says.

"Several years ago, we began holding a family meeting together," he says. "Now, it's one of the most wonderful traditions that we look forward to every year."

These meetings can help overcome the stickiest of issues, such as philanthropy and inheritances, because they provide a forum to express feelings. And when it comes to the almighty dollar, there is a lot of emotion involved.

"My experience is people tend to bring in money as a substitute for other things, particularly, love," he says. "Even if there's no money for inheritance, people fight over approval and love from their parents every single day, whether there's money involved or not."

Two other emotions frequently tied to money are greed and fear -- both strong motivators that in extreme cases can cause otherwise loving people to act selfishly when a pile of cash is at stake.

"When you have a very elderly person who is vulnerable and there's money involved, it can bring out the greed, and greed can motivate people to do all sorts of strange, nasty things," Grubman says.

Instilling strong values about money can help stop emotions from running amok at important times, and that's where education, the other basic building block of a good foundation, comes into play.

Passing on good values about money from one generation to the next seems elementary, yet it's something many fail to do.

"Sex and money are the two things we're somehow supposed to come into adult life knowing about without ever having any training in or teaching about," Grubman says. "We're supposed to magically know as adults what to do, often with little guidance."

By the time we reach adulthood, it can be very hard to change our attitudes about money because the major learning window -- ages 7 to 14 -- has passed.

"That is the prime age period when we're learning the most about the world," Grubman says. "A nine-year-old is very interested and ready to learn about saving, spending and staying out of debt, and yet if there's no talk in the family about that, how is that nine-year-old supposed to learn?"

Grubman says an allowance can be an excellent, yet much ignored, learning tool in this regard. If children are given a little cash in exchange for doing chores, they must be responsible for managing that money.

"In a sense, it's sort of a little mini-economy that you can introduce your kids to, because it's not just about the allowance" -- it's an opportunity to pass on values about money.

All too often, these chances to pass knowledge from one generation to the next are missed, leading to future conflicts similar to those experienced by landed immigrants and subsequent generations, Grubman says.

As with immigrant families, these clashes can be the result of the best intentions.

"Parents or grandparents often try to make life easier for their kids, who are natural-born citizens of the land of wealth," Grubman says. "In doing so, they keep them away from all those battles where they can learn to fight for themselves, and so, lo and behold, what do you get?"

The answer is perhaps best personified in the baby boomers and other generations who followed the ones who experienced the Great Depression.

They're maybe less able to manage risk. Either they're afraid of it, they misuse it by going into debt and overspending, or they are simply passive about money, Grubman says.

These are not the traits of any one generation; they're often universal. But each step up the ladder of affluence increases the magnitude, and for the wealthy, the volume is that much louder, he says.

Still, the good values do get passed along in many instances. Among them is being charitable, arguably the most important of life lessons a parent can teach, Grubman says.

"It tends to offset the sense of entitlement, it keeps people humble and it also promotes good values, which are simply part of good living."

giganticsmile@gmail.com

Republished from the Winnipeg Free Press print edition March 26, 2011 B11

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