The Power of Story-Based Estate Planning, Part 1

by Jackie Bedard on April 8, 2010

in Estate Planning

When I set out to open Carolina Family Estate Planning, I wanted to develop deeper relationships with my clients and help them truly understand how their plans work. In my experience, clients are looking for trusted and caring advisors that will help them create a legacy for their loved ones—this includes both financial and non-financial aspects. Yet most professionals are not meeting their clients’ legacy-oriented goals.

In working with the National Network of Estate Planning Attorneys and the Sunbridge Legacy Builder Network, I’ve worked to develop a story-based planning approach rather than the traditional “numbers” based approach used my most professionals.

To that end, over the next few weeks I will be sharing a great series by Scott Farnsworth, founder of the Sunbridge Legacy Builder Network on the importance and power of using a story-based approach in estate planning.

The Power of Story-based Planning – Part 1 – By Scott Farnsworth

Virtually all my “official” training as an estate planning attorney and a Certified Financial Planner has been about numbers. Tax rates, code sections, rates of return on investments, asset allocation models-the unwavering focus has been on something quantifiable. The underlying message always came through loud and clear: unless something can be tallied on a ledger sheet, it isn’t worthy of our professional attention and probably isn’t all that important. Only “numbers-based planning” is real planning.

But my gut-and my real-life experience-told me something different. They told me that when numbers-based planning collided with human beings, i.e., our clients and their children and grandchildren, either the planning was never actually implemented by the clients, or the wheels came off when the planning landed with a thud on the succeeding generations. They told me that the most clever and tightly-wound estate or financial plans could and would be unraveled by the people they were designed to “help” or “protect.” They told that we planners ignore the human issues at our peril, and at the peril of the beautiful numbers-based plans we crank out.

My sense was often that with numbers-based planning, the tax tail was wagging the dog-driving the planning instead of riding in the back seat along with all the other significant but not critical factors. One significant study found that the likelihood of a family-based business surviving into the second generation was inversely correlated to the amount of tax planning the first generation had done. (Correlates of Success in Family Business Transitions, Morris, Williams, Allen, and Avila, Journal of Business Venturing 12, 365-401, 1997) In other words, the tax doctors were actually killing the patients they were hired to “save.”

Numbers-based planning might work if we were planning for robots, but we’re not. We’re planning for real flesh-and-blood people. I recall a series of conversations with a couple from New York City who had spent tens of thousands of dollars for one of the premier law firms in the country to draft a plan to care for their estate and their two teenage children. The plan touched all the legal and tax-planning bases, but in the words of the wife it was “cold and impersonal, not what I want to leave for my children.” The expensive, well-drafted plan was never executed but remained nothing more than a pile of paper, glistening with lawyerly brilliance on the surface but empty and meaningless underneath.

Unfortunately, that couple’s experience is repeated all too often. In my view, such outcomes will not change until we take a fundamentally different approach to this whole business of estate and financial planning. They will not change until we spend more time listening to client stories than tallying up their balance sheets; until we tailor their plans to the human hopes, dreams, and fears imbedded in their stories; and until the plans we create help them tell the story of their legacy-of who they really are and what impact they have had and hope to have on the people and causes they love. I call this approach story-based planning.

Scott Farnsworth, J.D., CFP is an attorney and Certified Planner with more than 30 year in the estate, business, and financial planning fields. He is the CEO of SunBridge, Inc. and the founder of the SunBridge Legacy Network. He is a nationally recognized author and expert on practical, holistic, family-friendly planning. Scott was recently named one of Financial Advisor Magazine’s ‘Innovators of the Year.’

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The Power of Story-Based Estate Planning, Part 2 | North Carolina Wills and Trusts
April 20, 2010 at 7:11 am
The Power of Story-Based Estate Planning, Part 4 | North Carolina Wills and Trusts
May 5, 2010 at 7:09 am

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