A recurring and extremely useful conversation I facilitate with the financially fortunate families I work with centers on the concepts of “equal” and “fair.” Earlier blogs addressed the interplay of these concepts in July 2011 and September 2011 and I share a more personal experience about them in this column.
Recently, I had a conversation with my mom that exemplifies the need for families to discuss these ideas and the positive outcomes possible. I share the conversation with permission of my mom, dad and sister.
Growing up my dad and younger sister Jill and I would often go to NY Rangers hockey games at Madison Square Garden (MSG). In recent years we drifted away from the ritual for a number of reasons, not the least of which is my dad’s Parkinson’s disease having progressed to the point that he is in a wheelchair most of the time and the logistics are daunting. However, last year we pulled it off: Jill, my dad – and my 92 year-old Aunt Lee whose unbelievable energy is mystifying; she kept offering to help my 79 year-old dad and was able to do so.
I recently felt up to the challenge of venturing to MSG again and mentioned it to my mom. She encouraged it and offered to pay for all the tickets and the car service to drop us off and pick us up after the game at the wheelchair entrance. I let her know I appreciated her offer but that I knew she and my dad have serious financial challenges as his condition progresses. Also, my sister has just gone on disability thirty years after a very bad car accident that happened when she was a teenager. She did everything she could to put up with the pain and simply could not manage going to work any longer. Her two-income family’s income just dropped by half. It made sense to me that I pay my own way since my wife and I both have successful careers, and the parental/family resources go to those most in need.
Here is the conversation that ensued:
Mom: “That is very generous and sweet to offer to pay your own way but I do not want you to be penalized for success and hard effort and good luck.”
Jeff: “Now that I think about it, if you did not offer, I might have felt a bit disappointed and left out – like wanting to get an invitation to a big party all your friends are invited to even if you do not want to go. Nice to think they at least want you there.”
Mom: “That’s funny. And you make a good case for paying your own way. And it also makes sense that I want to be generous to both you and Jill.”
Jeff: “I really would be fine either way, knowing you want to be as generous with me as you are with Jill. That means a lot to me. Funny how powerful the emotional aspects are, outweighing the money.”
Mom: “And I am fine as well either way. Are these the kinds of conversations you have with families you consult to?”
Jeff: “Essentially. Dynamics are pretty similar even with a few hundred bucks worth of hockey tickets. Which is kind of the point in my work – it is usually a lot less about the money and more about love, power, complex family relationships. A good talk goes a long way.”
“Equal” would have been if mom paid all expenses so Jill and I would have had the same financial outlay – zero. “Fair” involves more subtlety; there is no formula, and an honest and open conversation is necessary. In this case one way to achieve fairness would be that I pay for my ticket. Or, I could offer to cover the whole day for everyone if that does not make others uncomfortable – though I’m sure it would since we all like to pull our weight although money is only one of the mechanisms we use to spread that out. If Aunt lee attends again this year Jill can contribute by helping her navigate the women’s bathrooms at MSG – an invaluable way to help, which might help Jill feel she can make a significant non-monetary contribution.
Or, I could talk to Jill about how much I love and appreciate her, and that going to Ranger games as we did in years past means the world to me. I could let her know that my wife and I have been quite busy with our careers recently so we are easily able to handle the expense, and that it would mean so much to me to be able to share in a way that allows us to hang out like old times. Especially since she is going through a challenging time, I’d let her know there is no financial or emotional debt and remind her of how many ways we have shared with one another over the years.
“Equal” is a mathematical solution. “Fair” is a conversation full of possibility.
What is the Lesson?
Enterprising Families: One of the biggest opportunities centers around opening communication about the special type of family you are and, specifically, about how you work through the “equal” and “fair” concepts. From birthday gifts given along the way to inheritances yet to be received, open discussions can avoid misunderstandings and give you important information about the variety of perspectives existing in the family. And this can be done before any decision is made – the true beauty.
Advisors to Enterprising Families: This takes more than a quick sit-down with the senior generation when looking at a significant generational transition of wealth. Don’t let the simplicity of my hockey ticket example fool you. Start the ball rolling by having a conversation with clients about “equal” and “fair” and ask clients to tell you their thoughts. Listen carefully and remind them that opening the conversation when children are young sets a strong foundation for more specific conversations about assets, ownership and stewardship. Encourage them to begin in general terms by using the story above, for example, and then by working together to find how these concepts apply and can be discussed within their own family life situations.