It’s not a memo… it’s a Mission Statement

By Patrick Diamond, CFP®

As Jerry Maguire said: help me help you. The Wall Street Journal recently highlighted the increasing use of “Family Mission Statements.” Sometimes known as a declaration of purpose or vision, or sometimes called a “letter of instruction”, estate planning mission statements aren’t legally binding but can be helpful to beneficiaries to get a clearer picture of someone’s wishes. As noted in the WSJ article: “Some advisers embrace the statements as a way to increase a family’s chances of what they consider success, preserving their wealth for a century or more.” A family mission statement lays out principles and goals in a few sentences or a few paragraphs or even a few pages.

The saying "wealth is gone by the third generation" reflects a common belief that a vast majority of families lose their wealth within three generations, often attributed to a lack of financial literacy, poor communication, and a breakdown in family trust. Actual studies are debated, but helping beneficiaries by leaving additional guidance and advice is an idea worth exploring. Trusts and wills are legally binding and dictate how wealth is legally and contractually transferred and who is responsible for decision making (for example, by naming a successor trustee). A family mission statement or letter of instruction is not a legal document but is valuable in that it can provide loved ones with insight into your beliefs, values, and wishes.

Link to the full article below.

*Disclaimer: All blog posts are for educational and informational purposes only. Nothing in this blog post or any blog post is legal advice or investment advice.