Susan R. Schoenfeld, CEO and Founder of Wealth Legacy Advisors LLC serves as a ‘thought partner’ to families of wealth through personal attention and human spirit. Susan is an award-winning Thought Leader; she provides guidance on legacy, next-generation, stewardship, governance, leadership succession, and philanthropy. Susan recently spoke about risk in family governance, and the importance of thoughtfully crafting a family story.
“Risk is a great question to address in the context of family governance. The real risk is that the family wealth dissipates, the proverbial shirtsleeves to shirtsleeves in three generations — that G1 creates the wealth, G2 enjoys the fruits of that labor, and G3 is back working hard again because the wealth has diminished and hasn’t been intentionally stewarded.
“Of course taxes and external forces like the pandemic that we’ve just seen are also enormous risks. But the real risk is not engaging the next generation in a way that that empowers them to really have that seat at the table, and to become engaged in their family’s mission, vision and values.
“That engagement can start at the youngest ages because little kids love bedtime stories, and part of what I do is help families craft their family story in a way that it can be told consistently from generation to generation, to even little kids, as well as incoming members of the families through marriage. For example, shaping that story of how Grandma and Grandpa started a small corner store that’s now a nationally known supermarket and the family’s values that went into creating our family’s success becomes part of the family lore; it becomes part of who we are and what we stand for as a family.
“I worked with a family during the heart of the pandemic who had created their wealth through sacrifice and hard work. A big part of the work that I did with this family involved helping them give voice to and identify what their values were, and how they were going to epitomize those values and teach them to the next generation. One of the daughters told me that her teenager had Zillowed their home and also her friend’s home, and learned not only that her family was wealthy, but comparatively less wealthy than some of her playmates. And she asked me, ‘How do we address that in our parenting?’
“These are real issues. Those of you who think that your kids have no idea that you have wealth, there’s this wonderful thing out there called the Internet. Your kids use Zillow to see what your home is worth, they Google you and know more about you than you think they do. Even if somehow you have miraculously escaped your kids knowing about your wealth, at Thanksgiving when after dinner the grownups are having coffee and dessert and the kids are all upstairs talking, if your brother-in-law has told his kids about the family wealth now your kids also know.
“Pretending the wealth doesn’t exist may be more comfortable for you if you want to play that ostrich game, but your kids see how you live, they see how you travel, and they see your home in contrast to others. I once sat in an enormous home in Greenwich, CT, and the man said to me, ‘My kids have no idea that we’re wealthy; we live in the smallest house on the block.’ I replied, ‘Your son is 17, and he’s about to go off to college. Do you really think that his college roommate is also going to be from Greenwich and a hedge fund fortune? It’s possible, but it’s also equally possible that he might be a scholarship student who is from a much more modest circumstance.’
“Yes, these are these are scary conversations to have. These are hard conversations to have. And sometimes having a neutral third party to facilitate those conversations makes them a little less threatening.”
Susan Schoenfeld, a public speaker & thought partner to families of wealth and their advisors, is an author and award-winning thought leader. Susan’s decision to switch from being a successful estate planning attorney and CPA to become a trusted family advisor and thought partner was inspired by families of wealth asking her searching questions beyond estate tax planning. As a conflict-free advisor who provides no investment, tax, or legal advice and sells no product, Susan shares her insights directly with wealthy families and with financial services experts. She is active as a keynote speaker and a leader of break-out sessions and workshops at conferences throughout the US.
