This is a guest post from Ron VanSurksum, CFP originally posted on his blog here and reproduced here with his express permission.
A Family Mission Statement Can Help Any Family Manage Assets, Philanthropy and Direction
A family doesn’t need a surname like Vanderbilt to benefit from a family mission statement. A mission statement is a collaborative document created by one or more generations of family so standards and goals can be set for the handling of all family assets, including businesses and philanthropy in particular.
While mission statements aren’t legal documents – in fact, many are done both in written form and on videotape as a companion to legal wills and directives – their purpose is to make a record of the family’s values, goals and aspirations and how those sentiments should drive future decisions about family wealth management, business succession plans and charitable pursuits. Multi-national companies have mission statements. Non-profit corporations have mission statements. A mission statement for your family, helps identify and clarify specific values and goals, facilitates group decisions, instills confidence and encourages unity.
It should also identify family leadership who will work with other relatives in implementing those goals.
While the end product should produce a document built from discussion, argument and consensus, it’s not so much about the piece of paper as the process. Many families start the process as a way to build consensus about long-term financial, business, estate and philanthropic goals, but the conversation can take twists and turns that don’t directly involve the family money. In this process, a family can identify the strengths, weaknesses and unearthed priorities of all family members and might reveal leadership few had expected.
Trained financial advisors including financial planners, tax experts and estate attorneys, can help explain the process and set an agenda for families to follow in creating the mission statement. While some extended families may elect to bring in a facilitator to guide their process, there are generally four components to a family mission statement – estate issues, philanthropy, business planning and family dynamics in general.
It also helps to start with some questions that can guide the discussion. Many experts start with questions that first get family members talking about their relationships and how their dynamics work, and then move into business and money matters.
- What’s most important about our family?
- What do you think our goals should be?
- When do you feel most connected to the rest of us?
- How should we relate to one another?
- What are our strengths as a family?
- Where do you think we’ll be as individuals in 5, 10 and 15 years?
- In order, what are the five things you value most in life?
- How should we behave toward each other?
- How should we take care of relatives who are or become sick or disabled?
- How should we resolve our disputes?
- How important is the family business to you?
- What should we be doing differently with our family money as well as our assets inside the business?
- What professionals or structures should we bring in to help us manage our wealth?
- What’s the best way for us to be building our wealth?
- What do you think the role of our family should be in helping the community?
- What should we be doing individually and as a family with regard to philanthropy?
Structurally, the written mission statement can be whatever you agree it should be – most experts say it should be no more than a paragraph long, but that’s a guideline, not a rule. It is also very important to focus on the positive, meaning what you want to accomplish and achieve as a family, as opposed to want you want to avoid. And it needn’t be set in stone – a family should have a meeting every year or two to revise or approve its mission. The family mission statement helps a family establish its identity and the variety of voices within, and those voices may be subject to change over time. The family mission statement is a living, breathing document that can evolve over time. In today’s fast paced world, it is easy to get caught up in the here and now, a family mission statement can help you stay true to your family’s values. As a result, families may not feel the pressure to keep up with the Joneses because their mission statement helps achieve balance. It is also very important to focus on the positive, meaning what we want to accomplish and achieve as a family, as opposed to want we want to avoid.
The right mission statement can help reset goals and diffuse tensions later. It can also be used to moderate discussions that inevitably happen after major changes within the family – death, divorce or happily, an increase in the number of heirs and participants.
As for the age of the participants, it can start in very basic form with younger children and the process can mature as they age. It’s actually a good idea to bring young members into a customized version of the process for youngsters so they can comfortably adjust to working as adults with the older members of the family.
For additional resources on how to create a family mission statement, please consider utilizing any of these websites
June 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Ronald J. VanSurksum, a local member of FPA.