Wealth of Wisdom

SECTION 8MAKING SHARED DECISIONS

One of the most challenging aspects of managing financial wealth together as a family is making shared decisions. All families make decisions. But the ways they make decisions are often left unspoken and unexamined. Perhaps there is one “true” decision-maker, the wealth creator or the eldest family member. Maybe whoever “pushes” the most drives the decision.

For families to succeed over time, they need to make, on balance, more good decisions than bad ones; they also need to decide how to decide—that is, in a clear and intentional way, think through how to make various decisions, decide what works best for them in which circumstances, and then communicate those decisions clearly. This work is sometimes called family “governance.”

The chapters in this section explore different aspects of governance. In the first chapter, Lee Hausner offers an exercise that helps families visualize their existing structure of decision-making. Through asking family members at a family gathering to don different hats based on their roles in the family—parent, child, trustee, beneficiary, business owner, manager, etc.—a family can quickly see where authority for different decisions resides. They can also begin to discuss what information and communication are needed to make effective decisions. To top it off, it's a very fun exercise too.

Jim Grubman then offers a framework (first published in the first Wealth of Wisdom volume) for making wise decisions about different ...