2024 Week 9

Empowering Female Family Members Towards Stewardship

by BlogEducationFamily CapitalFamily DynamicsTransition Planning

Empowering Female Family Members Towards Stewardship

Who will lead your family’s legacy into the future is an important question ultra-high-net-worth (UHNW) families must carefully consider when looking at the rising generation. For aging stewards, the responsibility of preparing successors who embody the family values rests heavily. This question takes on additional dimensions when considering female successors. Guiding multi-generational families, we have seen firsthand how purposeful planning, early exposure, and mentorship empower female successors in this family leadership role. Still, some family stewards hesitate to transparently prepare daughters and granddaughters to lead one day. 

“What if they don’t show interest?”

“Isn’t it better if they choose their own path freely?”

While understandable concerns regardless of your successor’s gender, leaving the stewardship role solely to male successors often backfires. Without encouragement, guidance, and a belief in their skills, talented female family members may turn away from roles they could thrive in when given adequate support. This goes beyond ensuring your female family members reach their full potential. It goes to ensuring that your family legacy reaches its full potential.

Assessing Successors on Merit Over Gender

Tradition plays a strong role in UHNW families as stewards work to uphold the family’s legacies long-term. Over the years, family traditions that used to work well can turn into strict rules that may hinder the family legacy today. One such unwritten “rule” – the common preference for eldest sons to inherently assume leadership of family businesses and assets represents an outdated mindset.

Several of our clients have evolved their strategies by evaluating successors based on capability, personal interest, and value alignment rather than gender norms and are showing promising results. There are cases where daughters and granddaughters have emerged as highly qualified candidates based on their impressive qualifications and engagement, whereas previously, they may have never been considered for senior roles. Families pursuing this route have discovered great potential in cohesion and performance by empowering their best talent to lead, regardless of gender. These then encourage others in UHNW spaces still clinging to restrictive practices to follow suit for the good of their legacies, their families, and their greater community.

The Value of Increasing Gender Diversity in Succession

There are several important reasons for UHNW families to increase gender diversity in their succession plans. Going beyond outdated preferences to take a more equitable approach strengthens families in multiple impactful ways. When bias limits female family members from consideration for senior roles, it wastes their talents and caps their leadership potential. Identifying the most capable next generation members, regardless of gender, sustains your family’s talent pipeline more effectively. Including more women through merit-based evaluation processes helps preserve family talent and leadership over generations.

Additionally, in our work with UHNW families, many uphold admirable values like fairness, care for others, integrity, and equal opportunities. Excluding female family members from succession without merit-based reasons contradicts these core principles. Taking proactive steps for gender diversity aligns succession with values critical to your family’s legacy.

Cultivating Confident and Capable Female Successors

Tangible steps can make meaningful impacts for families committed to strengthening gender diversity in succession. Based on our experience, here are three best practices UHNW families have employed to nurture their female family members for leadership:

  • Objective Assessments of Capability and Interest – Building profiles of rising generation members and documenting their capabilities, knowledge, and interests assists in unbiased evaluations. This helps identify promising female successors based on merit rather than outdated norms.
  • Custom Leadership Development Plans – Once promising female talents are spotted, personalizing growth plans accelerates their readiness. Development areas may include finance literacy, operations oversight, relationship management, etc. Matching their individual strengths to steward roles fuels engagement.
  • Access to Networks, Advisors, and Experiential Learning – Connecting emerging leaders with external networks, family advisors, family mentors, and immersive learning experiences goes far. They gain exposure to diverse leadership styles while expanding their competencies. This adds to their confidence in leading the family legacy.

Overall, there are compelling talent management, wealth strategies, and values-based grounds for successful families to take purposeful actions to integrate more female family members into generational succession plans. Proactively addressing gender gaps aligns succession with principles, strengthening the continuity, accountability, and fairness of the family’s legacy across generations.

Listen to our Legacy Builders Podcast

Beacon Family Office helps ultra-high-net-worth families evaluate successors objectively and accelerate leadership readiness across genders through a well-tailored succession planning process. Connect with us today for an initial conversation.

3 Investment Rules for Estate Trustees

Beneficiary’s Guide to Amplifying Your Family’s Financial Future

by BlogFinancial PlanningTransition Planning
3 Investment Rules for Estate Trustees

Beneficiary’s Guide to Amplifying Your Family’s Financial Future

Imagine you’re the heir to a substantial fortune, responsible for maintaining and growing it. As a beneficiary, your financial future is relatively secure. However, in this security, several questions are raised. What will you do with this wealth? How will you contribute to its growth and preservation? And, perhaps most importantly, how can you make the most of this privilege?

To truly appreciate the role of the beneficiary, particularly when it involves substantial wealth, we must first understand the basics behind this term. Fundamentally, a beneficiary often carries the responsibility to honour the wealth that has been handed down from generation to generation. However, it’s not all sunshine and rainbows; it comes with its own unique set of advantages and potential challenges. 

To support you as you step into the world of being a beneficiary, there are three key elements that will help you make the most of the family legacy and the associated wealth.

The Significance of Grantors' Goals and Intentions

The wealth you inherit is a reflection of the goals, motivations, and intentions of those who created it—the grantors. Understanding this is pivotal, as it allows you to gain insight into the family history and relationship to wealth (along with family values, vision, and purpose). The choices the grantors make in structuring trusts and endowments can significantly impact your experience as a beneficiary. Their values and aspirations will shape the trust’s nature and structure, ultimately impacting its purpose. The trust documents—consider these the blueprints of the financial legacy—are where the grantors’ wishes are embedded. These documents are not just legal instruments; they are your legacy in written form.

For example, if the trust stipulates support for specific philanthropic causes, it’s your responsibility to ensure these commitments are fulfilled. If the grantors emphasized responsible investing, it’s your role to uphold their ethical and financial principles in managing the trust. In essence, your grantors’ goals and intentions are the soul of the wealth you inherit. To be a responsible beneficiary, you must not only grasp the financial intricacies but also immerse yourself in the values and dreams that underpin wealth.

Your Duties and Responsibilities as a Beneficiary

This brings us to what your duties and responsibilities are as a beneficiary. To do this, we always recommend taking the time to learn the basics of financial literacy. Really, this literacy is a vital element of fulfilling your role effectively. Being financially literate means you can have meaningful conversations with your trustees, grantors, and financial advisors, ask the right questions for clarity, and actively participate in the management of your wealth. It empowers you to make informed decisions, protect your wealth, and contribute to its growth, ultimately contributing to your family legacy.

Financial decision-making is another crucial aspect as a beneficiary; hence, being literate in finances will help you. One must be mindful not to squander the wealth but, instead, allocate it thoughtfully. This can involve diversifying investments to reduce risk, supporting charitable causes in line with the grantors’ values and wishes, and preserving capital for the benefit of future generations. By making decisions that align with the long-term vision, you’re ensuring that wealth remains a powerful force for good.

At Beacon Family Office, we firmly believe that the best way to preserve, protect, and grow your wealth is through education on how to work with it. Education is your greatest ally in building the competence required for the responsibilities that come with being a beneficiary. Seek out opportunities to learn from trusted financial advisors, engage in courses or workshops about managing your inheritance, and attend conferences or seminars on relevant topics. Connect with other beneficiaries who share their insights and experiences. The more you know, the better equipped you’ll be to navigate the complexities of wealth stewardship. In addition to formal education, personal growth and development should not be overlooked. Cultivating emotional intelligence, effective communication skills, and ethical leadership qualities will serve you well with your beneficiary responsibilities.

Beneficiary's Relationship with Trustees Through the Years

Your relationship with the trustees of your family assets—those responsible for managing and distributing the wealth—evolves over time. In your childhood, you might have been shielded from the complexities. Trustees make decisions on your behalf, ensuring your well-being. But as you grow and mature, the dynamic shifts. The responsibility to make choices, exercise prudence, and understand the wealth you’re inheriting requires more involvement from you. This period offers you a unique opportunity to blend the wisdom and values of the past with your aspirations and dreams for the future. The relationship with your trustees may then evolve into one of collaboration and guidance, where you work together to honour the grantors’ intentions while adapting to the changing needs and values of your generation. To learn more about trusts and trustees, visit this piece on Navigating Trusts.

As you embrace your role as a beneficiary, remember that this role is not solely about inherited privilege; it’s a responsibility. It’s an opportunity to preserve and enhance the legacy of your family’s hard work and dreams. Approach wealth inheritance with a sense of duty and awareness, and empower yourself to be a responsible and informed beneficiary. In doing so, you ensure that your family’s legacy endures for generations to come.

Listen to our Legacy Builders Podcast

Knowing that you’re a beneficiary of your family’s legacy, are you prepared and confident to carry out the responsibility that comes with this? Connect with us for an initial conversation on how to begin this journey as a confident, responsible, and engaged beneficiary. Book a call today!