Build A Living Legacy

Identifying your clients' values can help them leave their mark on the world.

by Robert Keith Musgrave, MBA, Ph.D.

The key to a living legacy is taking the time today to explain what is important to you and who is important to you while youre still alive. Its a conversation you can continue throughout your life. Building a living legacy also helps your loved ones by preventing self-absorption and teaching the importance of making a difference two concerns I often hear from other parents, many of whom are wealthy. But creating a living legacy doesnt require you to be a millionaire (although it doesnt hurt if you are).

So, how do you persuade someone to design a living legacy? I find that its not all that different from the approach we advisors typically take when discussing estate planning options with our clients; it just takes some vigilant exploration on your part.

FINDING SOFT FACTS
The late Harold Zlotnik, CLU, a 49-year MDRT member from Vancouver, British Columbia, Canada, used to say that our lives are full of hard facts and soft facts. The hard facts your name, age and account balances are the facts about you that are tangible or those that cant be disputed. The soft facts are completely emotional and sentimental: What do you feel? Whats important to you about your life, your family, your retirement?

Advisors who take the time to identify clients soft facts tend to connect in a meaningful way. All our professional advice to our clients is based around hard facts, in my opinion, but the advisor-client relationship only fully develops when we ask for and address a clients soft facts.

To uncover these soft facts, Zlotnik would ask a prospect if he or she had a will, fully knowing that more than 50 percent of us do not, and of those who did, 25 percent of those wills would be out-of-date or invalid. He would follow up with explorative questions: If you have a will, what does it say? If you dont have a will, what would you want it to say?

As we know, many people indicate they would like to leave everything to surviving family members, so Zlotnik would coax them to expound on their definition of everything. He would also address other areas related to legacy planning, such as financing higher education for their children and how much money they would like to have at retirement.

I take a similar approach in my practice. Ill ask questions such as, Who do you know who left a legacy? Its very likely the answer will be the name of an immediate relative, so Ill ask them more questions about that particular loved one and what their legacy was about.

UNCOVERING VALUES
These questions to obtain soft facts evolve into personal journeys and give us as advisors the opportunity to connect with clients. Asking only about hard facts wont result in the same opportunity, the same deep-rooted connection. Time spent collecting the soft facts is time that is very well spent.

If children are part of the picture, Ill ask, Is it your intention to treat the children equally or fairly? Prospects almost always answer: Equally, of course. But sometimes the answer is fairly. I ask them why their response was to treat their children fairly and not equally. Their response usually initiates a very interesting dialogue and requires meticulous planning; it will most certainly begin a long conversation around values and beliefs.

This interview and soft-fact-gathering process may appear too easy, even too trite, but its amazing how often it works and works well. This skill is acquired the same way we acquire the rest of our skills from our experience of asking the right questions and what we discover as a result. Details, hard facts and technical issues are developed and addressed later. The soft facts are the window to finding out how the individual thinks about their financial legacy and what makes them different from all of your other clients.

That uniqueness comes from two sources: physical, genetic composition and life experiences. The latter is what helps determine our values, and it contributes to what kind of legacy we want to leave our families and friends.

Ive found that more clients like the idea of creating a living legacy, and its rewarding for me to support their efforts.

FAMILY FOUNDATION
I share with clients the way my family is building a living legacy. I established a family foundation named after my late wife, Judith. Our four children, all in their 20s, are the trustees of the Judith Musgrave Family Foundation. This means they are responsible for the governance and the compliance of this foundation. Most young adults are not familiar with the obligations and operations of this kind, so the last few years have been educational for them.

As trustees, they decide which charities should receive gifts. I suggested each should choose causes they could support and present why that charity should receive funds from our family foundation. To emphasize the importance of this process, we arrange a weekend family retreat and invite the extended family. Each child formally presents their case for a share of the gifts. Their level of detail, style and content has dramatically improved during the past few years, and so have the philosophies and strategies behind charity designations.

The only rules weve set are that the gifts must be aligned with their mothers values, and the trustees must be in agreement. The trustees score each presentation the better the presentation and the stronger the argument, the more likely their charity will be selected.

Recently, the children began making investment decisions for the foundations funds, with some assistance, but it helps give them the experience they need to effectively manage the foundation. My role is simple: I make sure the money is in the foundation so we can make charitable contributions. We found that we could donate to the foundation while reducing our taxes. This win-win gives the kids valuable life experience, benefits charitable causes and keeps us coming together to talk as a family.