It’s essential to consider the sibling dynamics of family succession planning. Why? So, the process does not set sibling against sibling, ending in a family breakup or, at the very least, an impasse to the planning itself.
A deep understanding of individual financial personalities in any family succession conversation will deliver more effective discussions. Moreover, every person has money energy; this has nothing to do with amounts of money but more to do with how it drives our emotions and how it impacts our health, both positively and negatively.
Differing views of money
We’ve already established that the three siblings in our case study – Elizabeth (oldest), Eric (middle) and Christina (youngest) – have different personalities. Now let us look at their approach to money.
There are some common denominators: Each received the same level of education, and each has a trust fund from their late grandparents. So, the question is not, Do they have money? Rather, it is how do they use it, and are they financially literate?
Regardless of the siblings' talents in the family business, the more significant issue is that they view money differently:
- Having spent so much time with her father, Elizabeth has a sound knowledge of finances and a solid drive to reach critical goals. As a result, achieving results is a priority for her. She does, however, like to be in control which has resulted in challenges with her brother and sister.
- Eric is a thinker; he analyzes everything with sound research and can draw incisive conclusions. His reflection and thought processes infuriate his sisters, though for different reasons.
- Christina is referred to by her family as “the party girl” and that is not entirely true. She enjoys meeting new people, new situations and new environments and is the first to organize family parties. She is skillful at networking and has built many valuable relationships that have benefited the business. However, to do this, she spends big.
These differences are why discussing succession planning raises longstanding emotional challenges and rivalries that even they are unaware of.
Armed with insight
Armed with financial personality insights into an individual's identity, parents can talk with their children separately and explain why the plan will treat each uniquely. But this must be defined, so they understand that this is not punitive but, in the family’s, best interests and still equitable.
Whatever your unique family dynamics are, talking it out while everyone is alive helps you spot potential succession planning landmines and possibly reconcile relationships. After all, succession planning should protect family harmony, family wealth and the family business. Transition is always emotional, whether learning to live without a loved one or dealing with the vulnerability of losing the head of your family business.
This alone raises complex and emotionally laden problems, making it clear that if legal issues and acrimony are to be avoided, family succession conversations must begin sooner rather than later.
Despite the tensions and rivalries that naturally exist in all families, family conflict does not have to be inevitable.
Related: Behavioral Diversity + Relationship to Money = Diversity at Home