The Importance of Family Councils in Multigenerational Wealth
What is a Family Council?
The Family Council has different meaning for each family. Some choose to make each one official, others are more casual in their meetings. In my own family, its a hybrid of both. Depending on the context, a family council can look and feel different. Sometimes our family council can be official, where we meet together at an office and discuss family businesses, family led philanthropies, and discuss solutions to problems both within the family and outside of the family.
Other times, it is very casual and unofficial. This typically is eating something around the dinner table and have a good family discussion about what is important to each family member at that time.
Either way, we discuss solutions to problems and each family member may choose to be as involved as they wish to be.
Why A Family Council?
I previously wrote about something called The Three Generation Cycle. In this cycle, the first generation builds the wealth, the second will enjoy it and by the third generation, wealth is destroyed. It is common and many people have stories of rich families members like a rich grandparent or uncle, but they never got to enjoy the wealth.
So where do Family Councils fit into this?
During the family council, it is important to know what to discuss with your family. Too many people today do not talk about their wealth or the best practices of money freely with their family. It is important to discuss money with your family so that they understand the principles of wealth generation and preservation.
If you have followed me for a while, you know I am big into charitable giving. There is a reason for that. Family-involved philanthropy is the best way to ensure multigenerational wealth. I even have spoken at wealth-focused events on how philanthropy has even helped us build family wealth. When you and your family see the impact wealth can have on others, family members respect wealth and practice wealth keeping strategies to ensure it lasts for generations to come.