What is Wealth Transfer?

Before we can dive too deeply into the question of what is wealth transfer; let’s work on developing a common understanding of what constitutes wealth to begin with.  In my experience, people measure wealth in the physical universe context, limiting it to things like real estate, stocks, bonds, and other tangible assets.  However, I invite a broader definition and context, most specifically, for individuals, families and organizations we need to calculate and consider our human capital as a part of our wealth balance sheets.  Many folks use the term, “Mind, Body, and Spirit.”  There are indeed multiple levels to the game of life and this phrase is prophetically accurate in laying out a roadmap for how to approach each realm.

I see it as our “Mind” in the “mind, body, and spirit” correlating to our mental health and well-being, which simply breaks down to our brain and the things that happen inside of it.  Our physical body strongly correlates to this physical universe that we dwell in and for that reason it also is closely related and connected to the physical assets that are typically associated with wealth.  There is an adage that says, ‘health is wealth’ and this tends to reinforce the point about the physical body being a part of our overall wealth portfolio.  Finally, in dealing with the “mind, body, spirit” trinity the final part of us is that animating spark of our eternal souls, the spirit.

So, when we talk about our personal, family, or institutional/organizational wealth I proffer that it would be wise to contemplate and consider how assets in all three of these realms are accounted for and transferred to future generations.  Most specifically, our human assets, which can be measured in our life experiences, our processes, beliefs, and morals.  In some small way it simply can boil down to teaching someone to fish, as opposed to giving someone a fish.

In the most ideal situation, wealth transfer is a lifelong process of allocating your wealth, including essential elements of your human capital, to provide for and protect the people you love.  When thinking in terms of Legacy Planning wealth transfer will typically include assembling the documents that constitute the four building blocks of legacy – namely formulating a definitive chief aim, crafting a personal mission statement, writing out a strategic life plan, and drafting a personal legacy statement.  If you are charitably inclined, it is also an opportunity to benefit the broader community and establish a tradition of giving.

One component of wealth transfer and often the most thought of is providing for transfer at death, commonly referred to as ‘estate planning.”  Estate planning is limited in that it almost exclusively deals with only the tangible estate or our physical assets and fails to address or contemplate our human capital.  Another equally important component are transfers during your life, or lifetime gifting.  Lifetime gifting may yield tax advantages while allowing you to see the effects of your planning and, sometimes, to reevaluate and reconsider.  Items on the human capital balance sheet may be easier to gift during one’s lifetime because it will allow for conversations and feedback on the experiences, processes, beliefs, and morals shared during one’s life with those who matter most.

A good wealth transfer plan begins with your ideas, your knowledge and your intent.  This series of legacy lessons are designed to help you take a strategic journey from these first thoughts to a plan that is truly your own.  Along the way, it is helpful to keep in mind that there is no perfect combination of wealth transfer strategies.  Instead, there are many alternate means to achieve your goals.

Despite important differences, we do find that every effective wealth transfer plan has these things in common:

• It considers current realities, both emotional and financial.
• It succeeds in meeting well-defined objectives.
• It represents the collaborative effort of a team of professional advisors.

Advertisement

The Eight Dimensions of Holistic Wellbeing

(This article was updated on 3/10/2018 to add an eighth dimension to the pyramid, the financial wellbeing dimension was added as level four.)

We recognize that our purpose here on earth is greater than doing things or collecting things.  Here at the Legacy Institute, we seek to provide our practitioners a holistic set of tools and information to empower them in increasing their clients’ happiness and satisfaction with their life’s journeys.  The search for balance in life leads one to examine their holistic wellbeing.  Holistic Wellbeing is the pursuit of continued growth and balance in the eight dimensions of wellbeing. A lot of people think about “wellbeing” in terms of physical health only.  The word invokes thoughts of nutrition, exercise, weight management, blood pressure, etc. Wellbeing, however, is much more than physical health. Holistc wellbeing is a full integration of all six dimensions of our physical reality, as well as our mental and spiritual wellbeing. It is a complex set of interactions that when balanced together leads to quality of life.

Holistic Wellbeing is commonly viewed as having eight dimensions.  Each dimension contributes to our own sense of wellbeing or quality of life, and each affects and overlaps the others.  At times one may be more prominent than others, but the neglect of any one dimension for any extended length of time may have adverse effects on overall health and often is the cause of “dis-ease.”

Exploring The Eight Dimensions of Holistic Wellbeing

• • Level 1 – Environmental Wellbeing
  • Level 2 – Physical Wellbeing
  • Level 3 – Emotional Wellbeing
  • Level 4 – Financial Wellness
  • Level 5 – Intellectual Wellbeing
  • Level 6 – Social Wellbeing
  • Level 7 – Spiritual Wellbeing
  • Level 8 – Occupational Wellbeing

Level 1 – Environmental Wellbeing Dimension

Many people focus on the grander scale of the environment when discussing this particular dimension focusing on cleaner air, oceans and conservation efforts. We like to think of it in a much more personal sense. We define our environment as the places where we spend our time. This does include the oceans and the great outdoors, but more directly we see it as our bedrooms, homes, offices, cars, etc. These are our personal environments. Environmental wellness is an awareness of the unstable state of balance in our homes and communities as well as across the entire earth and the effects of our daily habits on the physical environment. It consists of maintaining a way of life that maximizes harmony within our homes and throughout the earth and minimizes harm to the environment. It includes being involved in socially responsible activities to protect the environment. It starts will cleaning and organizing our personal quarters.

Tips and suggestions for optimal environmental wellness:

• Explore the Chinese principles of Fung Shui for your home and/or office
• Deep clean and organize the place you spend most of your time
• Stop your junk mail
• Conserve water and other resources
• Minimize chemical use
• Reduce, Reuse, Recycle
• Renew your relationship with the earth

Level 2 – Physical Wellbeing Dimension

Physical wellness encompasses a variety of healthy behaviors including adequate exercise, proper nutrition and abstaining from harmful habits such as drug use and alcohol abuse. It means learning about and identifying symptoms of disease, getting regular medical checkups, and protecting yourself from injuries and harm. Developing such healthy habits today will not only add years to your life but will enhance the enjoyment and quality of those years.

Tips for optimal physical wellness:

• Exercise daily
• Get adequate rest
• Use seat belts, helmets, and other protective equipment
• Learn to recognize early signs of illness
• Eat a variety of healthy foods
• Control your meal portions
• Stop smoking and protect yourself against second-hand smoke
• Use alcohol in moderation, if at all

Level 3 – Emotional Wellbeing Dimension

Emotional wellbeing is a dynamic state that fluctuates frequently with your other six dimensions of wellbeing. Being emotionally well is typically defined as possessing the ability to feel and express human emotions such as happiness, sadness, and anger. Our clients have found wellness in this dimension more attainable when once they recognize they are the Observer of their own thoughts, feelings, and emotions. Having an awareness that you are not these things and separate seems to promote wellness. It means having the ability to love and be loved and achieving a sense of fulfillment in life. Emotional wellness encompasses optimism, self-esteem, self-acceptance and the ability to share feelings.

Tips for optimal emotional wellbeing:

• Tune-in to your thoughts and feelings
• Cultivate an optimistic attitude
• Seek and provide support
• Learn time management skills
• Practice stress management techniques
• Accept and forgive yourself

Level 4 – Financial Wellbeing Dimension

The financial dimension challenges us to master our economic landscape.  In this dimension we seek to develop satisfaction with both our current and our future financial situations.  Financial Wellbeing includes our relationship with money, skills to manage resources to live within our means, making informed financial decisions and investments, setting realistic goals, and learning to prepare for short-term and long-term needs or emergencies. Part of this dimension includes an awareness that everyone’s financial values, needs, and circumstances are unique.  Most express a need to expand their knowledge of financial matters and understanding of the tools available to find mastery in this dimension.

Tips and suggestions for optimal Financial Wellbeing include:

• Develop and stick-to a balanced and written budget
• Learn to understand and apply the Rich Dad Poor Dad Cash Flow Quadrants
• Make and execute a plan to eliminate your debt
• Consult a financial professional for advice and guidance
• Continue your financial education through live seminars, webinars, YouTube videos, books, magazines, etc.

Suggested Resources/Reading for Financial Wellbeing:

1. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!  Personal finance author and lecturer Robert T. Kiyosaki developed his unique economic perspective from two very different influences – his two fathers. One father (Robert’s real father) was a highly educated man but fiscally poor. The other father was the father of Robert’s best friend – that Dad was an eighth-grade drop-out who became a self-made multi-millionaire. The lifelong monetary problems experienced by his poor dad pounded home the counterpoint communicated by his rich dad. Taking that message to heart, Kiyosaki was able to retire at 47.

2. The Richest Man in Babylon  Beloved by millions, this timeless classic holds the key to all you desire and everything you wish to accomplish. This is the book that reveals the secret to personal wealth.

The Success Secrets of the Ancients—
An Assured Road to Happiness and Prosperity

Countless readers have been helped by the famous “Babylonian parables,” hailed as the greatest of all inspirational works on the subject of thrift, financial planning, and personal wealth. In language as simple as that found in the Bible, these fascinating and informative stories set you on a sure path to prosperity and its accompanying joys. Acclaimed as a modern-day classic, this celebrated bestseller offers an understanding of—and a solution to—your personal financial problems that will guide you through a lifetime. This is the book that holds the secrets to keeping your money—and making more.

Level 5 – Intellectual Wellbeing Dimension

The intellectual dimension encourages creative, stimulating mental activities. Our minds need to be continually inspired and exercised just as our bodies do. People who possess a high level of intellectual wellness have an active mind and continue to learn. An intellectually well person uses the resources available to expand one’s knowledge and improve skills. Keeping up-to-date on current events and participating in activities that arouse our minds are also important.

Tips and suggestions for optimal intellectual wellness include:

• Take a continuing education course or workshop
• Learn (or perfect) a foreign language
• Seek out people who challenge you intellectually
• Read, Read, Read
• Learn to appreciate art in all its forms

Level 6 – Social Wellbeing Dimension

Social wellness refers to our ability to interact successfully with our global community and to live up to the expectations and demands of our personal roles. This means learning good communication skills, developing intimacy with others, and creating a support network of friends and family members.

Social wellness includes showing respect for others and yourself. When we see those we interact with as mirrors of ourselves, we have opportunities to grow and develop a deeper understanding through what we see. Contributing to your community and to the world builds a sense of belonging.

Tips and suggestions for optimal social wellness include:

• Cultivate healthy relationships
• Get involved
• Contribute to your community
• Share your talents and skills
• Communicate your thoughts, feelings and ideas

Level 7 – Spiritual Wellbeing Dimension

Spiritual wellness involves possessing a set of guiding beliefs, principles, or values that help give direction to one’s life. It encompasses a high level of faith, hope and commitment to your individual beliefs that provide a sense of meaning and purpose. It is willingness to seek meaning and purpose in human existence, to question everything and to appreciate the things which cannot be readily explained or understood.

A spiritually well person seeks harmony between what lies within as well as the forces outside.

Tips and suggestions for optimal spiritual wellness:

• Explore your spiritual core
• Spend time alone/meditate regularly
• Be inquisitive and curious
• Be fully present in everything you do
• Listen with your heart and live by your principles
• Allow yourself and those around you the freedom to be who they are
• See opportunities for growth in the challenges life brings you

Level 8 – Occupational Wellbeing Dimension

Occupational/Vocational wellness involves preparing and making use of your gifts, skills, and talents in order to gain purpose, happiness, and enrichment in your life. Oprah instructs us to seek to find our bliss, the thing that brings us joy, and then seek to find a way to make money or monetize whatever it is that brings you such joy.  The development of occupational satisfaction and wellness is related to your attitude about your work. Achieving optimal occupational wellness allows you to maintain a positive attitude and experience satisfaction/pleasure in your employment. Occupational wellness means successfully integrating a commitment to your occupation into a total lifestyle that is satisfying and rewarding.

Tips and suggestions for optimal occupational wellbeing include:

• • Ask yourself if you would do anything at all with no limitations
  • Consider what your life’s journey has prepared you for that is unique
  • Create a vision for your future
  • Choose a career that aligns with your personality, interests, and talents
  • Be open to change and learn new skills

Now that you have reviewed all eight dimensions of holistic wellbeing what are the first things that come to mind? What are you going to do differently in your life to achieve more balance and wellbeing? Do you have a better understanding of how everything in our entire world impacts our holistic wellbeing?

Understanding Generativity

“Generativity • The ability to generate anything tangible that will exist beyond one’s earthly life; particularly when exhibiting a need to nurture and guide younger people and contribute to the next generation.” 

~ Don West, Jr.

“Generativity • A desire to invest one’s substance in forms of life and work that will outlive the self.”

~ Dr. John Kotre

Introducing Don West, Jr.’s Legacy Pyramid

Created by Don West, Jr., who serves as our Director of Education, the Legacy Pyramid is a visual model for a twenty-two part system for multi-generational happiness, success, and prosperity.

The Legacy Pyramid’s methodology integrates lessons and teachings from history’s greatest thinkers including: Coach John Wooden, Benjamin Franklin, Napoleon Hill, Dr. Wayne Dyer, Deepak Chopra, Og Mandino, Stephen R. Covey, Prentice Mulford, Carl Jung, John Maxwell, Tony Robbins, Zig Ziglar, John Kotre, Don West, Jr., James E. Hughes, Jr., and many more.

Stone 1: Humility & Service (Foundation) 
Stone 2: Industriousness (Cornerstone #1) 
Stone 3: Enthusiasm (Cornerstone #2) 
Stone 4: Definitive Chief Aim
Stone 5: Junto/Mastermind/Universal Mind
Stone 6: Iron Grip Control & Management
Stone 7: Imagination
Stone 8: Excercise/Physical Fitness
Stone 9: Habit of Giving & the Law of Saving
Stone 10: Initiative & Leadership
Stone 11: Concentration
Stone 12: Acute & Accurate Thinking
Stone 13: Pleasing Personality
Stone 14: Cooperation
Stone 15: Intentness
Stone 16: Practicing the Golden Rule
Stone 17: Universal Law
Stone 18: Generativity
Stone 19: Competitive Greatness
Stone 20: Self-Control
Stone 21: Self-Confidence
Stone 22: Temet Nosce/Know Thyself

Don often shares how he developed the Pyramid in his speeches, some of the books he cites as primarily influential in developing the Legacy Pyramid include, Wooden’s “Pyramid of Success,” and Hill’s “Laws of Success.”

The staff has gone through the recordings of all of Don’s talks regarding the Pyramid to date and we developed this presentation of “17 Books That Influence The Legacy Pyramid.”

What is a Trust?

Trust ● a legal entity created through a written document that creates a fiduciary relationship in which one party, known as the trustor, gives another party, the trustee, the right to hold title to property and/or assets on behalf of one or more individuals, the beneciciary.

Prince’s Estate Hires 2 Music Execs to Oversee Assets

Prince died on April 21, 2016 and one of the most urgent questions for the music industry was how quickly the estate could hire professionals to handle the star’s vast collection of songs and other media content.

The answer was two months. On Friday, Bremer Trust, a Minnesota bank that is acting as the special administrator for #Prince’s [#probate] #estate, confirmed that it had appointed two seasoned executives, L. Londell McMillan and Charles A. Koppelman, to manage Prince’s entertainment #assets, according to Marcia A. Jensen, a spokeswoman for the bank.

Read the complete NY Times article here

A Buena Park Plumber Leaves Substantial $2 Million Estate But Only A Copy of Last Will

It is very important that your documents can be located when the time comes.  This estate has substantial assets, 69 cars and multiple properties worth upwards of $2 million dollars, yet there is no clear heir because the most recent will discovered was only a copy.  Make sure your intentions and wishes are honored by keeping your documents in some place other than the trunk of one of your cars as is the case with this deceased plumber.

You can read the complete story in the Orange County Register HERE.

Where are your current estate planning documents stored?

I Am Not Famous, Do I Have a Legacy? Who Needs Legacy & Estate Planning?

So many of the clients that I sit down with begin their objections with I am not some famous celebrity such and such so I do not have a legacy that anybody is going to care about. But what many of us often fail to realize is that in our worlds and to those closest to us, especially our relatives in most cases, we are each and every one of us a superstar – the only difference, the size of our stage. So when you have kids, grandkids, nieces or nephews who look up to you and hang on your every word – those are your fans; that is your audience.  Let’s not forget that all family is not biological, there are also family’s of affinity which develop through the bonds of affinity and choice rather than biology alone.  No matter which type of family you have, I’ll bet that if you close your eyes for ten seconds, maybe you can see their grandkids’ grandkids many generations off into the future.  It is for this far off envisioned future that we lay our plans.

Each life is a unique story woven and developed over the special circumstances of your lifetime and is therefore priceless and irreplaceable. Once our stories are lost, they are just that – lost, forever. Is there a pressing question that you wish you could pose to one of your ancestors? Do you ever sit and wonder how your family came to be settled in blank place, somewhere town?

Every life is a story, every life is a legacy. We all have the opportunity to be proactive and plan for how our stories, our philosophies, business practices, beliefs and belongings will be handled now in this present moment of our lives as well as moving forward in a strategic and planned manner. This is the foundation of legacy and estate planning. When you look back throughout history you can find some excellent examples of excellent planners. Let’s look at two famous people as examples here.  Examining their lives and bodies of work what do rock legend John Lennon and crooner Bing Crosby have in common – seemingly not very much. However, following their passing, it became clear that each man had been both thoughtful and proactive in planning how their estates would be discreetly handled and efficiently dispersed.

We each have the opportunity to follow the examples of well-organized and proactive individuals or we can take the oft traveled path of the many whose stories are destined to the trash bins of history and who estates and affairs will be sorted out however by whomever.

Which person are you?

Are you going to be proactive and engage in some intentional advanced planning?  Or just let chips fall where they may and do nothing at all?  The choice is yours.

If your answer is yes and you would like to learn more about legacy and estate planning, the next subject in this series is, “What is wealth transfer?” so stay tuned for that coming soon.

Not to worry, there are professionals out there to assist you.  Almost always solid planning reflects a collaborative effort of a team of professional advisors.

What Happens to Facebook & Twitter Accounts When Someone Dies?

What Happens When Someone Dies?

It is a fact that we’re all going to die, and if you’re on social media sites like Facebook and/or Twitter, you may be curious as to what will happen to your account when you’re gone.  You can express how you would like your account handled by preparing letters of
instruction.

Each social network has their own process and options to handle the profiles and accounts of the deceased.   We are going to cover Facebook and Twitter in this post so continue below to learn more about each site’s policy.

What Happens to Your Facebook Profile When You Die?

Facebook

The process for a deceased person’s Facebook account has several different options and is different then many other social media services.  First, Facebook utilizes an online form that allows anyone to notify Facebook about a deceased user by submitting a valid request electronically.  Facebook will then memorialize the account, which means that nobody will be able to log into the account and only confirmed friends at the time of memorializing will be able to see the profile of the deceased.

Unlike Twitter, Facebook allows the confirmed friends to post information and photos on the wall of the deceased, and many people use this as a way to share their thoughts and feelings as well as celebrating the life of the deceased.

In the alternative, Facebook also allows an immediate family member to request that the deceased’s account be completely removed from the site.  In order to do this, Facebook requires that you verify your identity and relationship to the deceased by providing the deceased’s birth and death certificate and proof that you’re a lawful representative of the deceased.

GET A FACEBOOK LETTER OF INSTRUCTION

Do you have a Twitter Letter of Instruction?

Twitter

When someone dies, it is the responsibility of a family member or person in charge of the deceased’s estate to reach out to Twitter administration and let them know. Along with the information, Twitter will need this individual to provide them with the username of the deceased, a copy of the individual’s ID, a copy of the deceased’s death certificate, and a letter that contains information about the person making the request.  Twitter does  not have an online form and requires requests to be submitted via fax or mail.

This person has the ability to decide whether they want the deceased’s account completely deleted from the site or if they want a backup created of the deceased’s public tweets.

Once Twitter has been notified, the deceased’s account will no longer be found in the Who to Follow section and messages will not be accepted on the page. If a person wants to leave a tweet for a deceased individual, they will have to have login information for the deceased’s account.

GET A TWITTER LETTER OF INSTRUCTION

In the United States approximately 80% of population has not taken the time to prepare any written plans and instructions in the event of death.  It is not a pleasant topic for most people, and pondering what will happen to your social media accounts when you pass is not something that many people think about on a typical day.   By preparing simple letters of instruction for your Facebook and Twitter accounts you ease the burden on those you care about after you die, because they will need this information and will have it neatly compiled and documented.  It’s also a good idea to share the existence of these instructions and how to locate them when necessary with friends and family members so that everyone knows about your wishes.

If someone you love has passed away and they have a Facebook and/or Twitter account, make sure that you let the social networks know as soon as possible so that the proper steps can be taken and their wishes carried out.

A Parable About a Family Business – Pt. I

It all started out as an idea….

In the beginning there was a great business idea.  When the business started out it was small.  The owner was determined, diligent and talented.  The business grew.

After some time it was a much larger business and had many employees under its roof.    The owner’s children were now grown and some decided to work in the business.  The other children did not, choosing to find their own paths in life.

Soon there were issues, mainly disagreements over what to do with the profits.  The inactive owners wanted to be paid dividends… now!  The active owners saw the need to reinvest profits back into the business for future growth.

The founder was ready to retire.  But there was little savings or liquidity outside the business.  The founder wanted to be conservative and protect the cash flow for himself.  The sons and daughters working in the business wanted to be more aggressive and grow the business to remain competitive.

There was no way for the inactive owners to sell their ownership.  They wanted high dividends to make up for the lack of liquidity.

Without warning one of the owners died suddenly from a unforeseen medical condition.  The owner’s grieving spouse wanted to be bought out immediately.  The business had to borrow money from the bank to repurchase the outstanding shares.

The tensions of keeping the business afloat continued to increase and one of the owners kept bringing the stress home.  Soon there was a divorce.  This event caused a small financial emergency for the business.  Soon there was a demand for more money.  A loan was made to the divorced owner.

Another owner had a gambling problem.  But it was discovered and addressed too late; there were too many credit card bills.  A bankruptcy was filed.  More money was need.  Another loan was made.

The family members stopped taking to each other; there were too many hurt feelings and too much mistrust.

The inactive owners still wanted their dividends, now!  They didn’t understand the internal operations of the business.  No one had explained to them the need to leave the money in the business for it to be competitive in the market.

The founder had never decided who was going to take his place.  It was left up to a committee when he died.  The estate tax bill arrived in the mail.  There had been no planning.  There was no cash or lines of credit available.

There was an auction.  The assets were sold.  The business is gone.  The End.

This is a sad, sad story.  But unfortunately it happens… over and over again.  Does any of this story sound similar or familiar to events or conditions within your family business?  Please don’t let this happen to your family.  We have many tools and procedures to prevent this parable’s effect taking hold within your family business.

*****

Donald L. West, Jr., JD, CTLP,  serves as the Associate Director of Education to the Legacy Institute, is a Chartered Legacy & Trusts Planner, a Personne De Confiance, the Creator of the Legacy Pyramid and co-author of A Step-By-Step Guide To Crafting Personal Legacy Statements.

The Legacy Institute, (A.I.L.E.P.), is an organization devoted to empowering families and closely-held business entities cultivate multi-generational connectedness, growth and prosperity.