Creating a Family Constitution — Susan Schoenfeld
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 participated in a panel where she spoke about family governance and the importance of a family constitution.
“Starting the conversation about family governance is perhaps the most important step. Governance is just a fancy term to describe how a family makes decisions. It is critical to be proactive and discuss how your family is going to decide on investments, distributions, philanthropy, social impact, compensation, and more.
“It may be that at the wealth creator generation, they alone make all the decisions, and therefore the family doesn’t yet need a governance process in place. But when they have, say, three kids and then each of those three kids has three kids, now you’re talking about a lot of people.
“As the family grows exponentially and there are more generations, you may want to consider establishing a system of a representative governance. Creating a family constitution is useful to prevent ambiguity on a variety of concerns. For example, you can stipulate how you will educate and engage the rising generation as they reach adulthood and those who marry into the family in your mission, vision and values.
“It is always encouraging when a family engages me to help them think about establishing a Family Constitution. People always ask, ‘What goes into a Family Constitution?’ The answer is what really matters to your family. Start with a preamble — just like our Founding Fathers did — stating who you are and what you stand for, including your family values. Next, codify what you want to do with your wealth both internally within the family and externally in the world at large.
“There are many different aspects to a Family Constitution. When I work with families on one, assuming it’s a large enough family to accommodate this, I like to break them up into groups and have one group work on the distribution policy, and another group work on the investment policy, and yet another group think about what their social impact is going to look like, and other groups will consider all the other different pieces that go into how as a family they will move forward in a cohesive way. It should address everything from investments to who gets Christmas week at the family vacation compound.”
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.
