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A successful estate plan involves some uncomfortable questions

Don’t put off this important conversation with your advisor until the new fee disclosure rules take effect in 2016, and find out what you’re getting for your money.

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Chances are you've seen them on TV: self-centred, self-absorbed "trust fund babies." The children of the wealthy, they've inherited their parents' money, but not their parents' drive or ambition. Instead of feeling humble about their life of privilege, they feel such a life is owed to them.

This is the image we normally associate with the phrase "entitled brat." And it's true, they are many out there. But spoiled kids aren't the only ones who suffer from "entitlitis." Case in point: the parents of NHL defenceman Jack Johnson, who allegedly bought luxury cars, beachfront property, and borrowed almost $15-million against their son's future earnings, forcing Johnson to declare bankruptcy.

Recently I had the pleasure of speaking with Francesco Lombardo, a business family adviser who's written a number of books on estate and succession planning. He and I share the view that asset transfer is as much about emotions as it is about money, and driven by family dynamics as much as financial issues.

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I've known Francesco for a number of years, and I've never known him to pull punches or mince words. He certainly doesn't with the title of his recent book: Entitled Brat or Contributing Leader: which one are you? Are you sure?

"The next global epidemic we're facing as a society is entitlitis," he told me in his usual blunt style. "Unless we do something about it, we're going to have a whole bunch of takers instead of contributors."

"Entitlement isn't just that spoiled rich kid or that trust fund baby that we typically think about," Lombardo says. "Entitlement is in all of us. Every one of us at some point feels entitled to our beliefs, our judgments, our prejudices, and our thoughts. [And] when we impose those on others, we can't truly contribute. We are imposing, therefore we're taking."

This is an important insight, with significant implications on how we think about estate planning. As Lombardo explains, if your estate plan is all about imposing your beliefs, your desires, your idea of how family works, you're likely to pass on a legacy of disruption and conflict. And that's true whether you're passing on the family home, a small insurance policy, or a multi-million dollar estate.

There's a growing sense that your estate/succession plan must be more "human" if you want it to be successful. The focus should be on family, not just taxes, trusts, and technical stuff. Rather than thinking "It's mine, and I can do what I want with it!", we should be thinking: "It's ours. Let's find out what we want it do to for us."

I admit, this might seem like a very "soft" approach to some. But if you're concerned about passing on wealth in a way that enriches the lives of your children and allows your heirs to flourish–if you want your estate plan to pass on your values as well as valuables–I encourage you to think about "entitlitis" and how you can stop it. Here are some suggestions:

Look the brat in the mirror
If you're serious about becoming someone who can guide the next generation to achieving great heights, you need to first acknowledge the "brat" within yourself.

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Ask yourself: what financial beliefs do you feel "entitled" to? What do you believe about love, money, power, responsibility, ownership, family, and success? What are your money prejudices? And how much are your financial biases driving your estate plan?

The goal of these questions is to help you explore what you believe about work and success, and try to understand how those beliefs may affect your family relationships in a negative way.

Know the "why" of your estate plan
I'm talking beyond the obvious goals to minimize taxes and pass money on to heirs. Beyond the financial stuff, what exactly is motivating your estate decisions?

What's the reasoning behind leaving a given asset to a given heir? What do you want to celebrate or encourage or support within your family? What specific actions do you need to take in order to provide that support? How can you align specific estate strategies with your personal vision for the future of your family? The best estate plans I've seen attempt to answer these tough questions.

Have the (awkward) dialogue
A key part of a "family-centric" estate plan is family involvement. And the key word here is "dialogue"–a back-and-forth discussion, not simply an "FYI session" in which you let your heirs know ahead of time what you plan to do.

Instead of telling, ask difficult questions of your heirs, and listen to their difficult feedback. Make yourself aware of the failings and shortcomings they've experienced. Be transparent and authentic about your intentions. Commit to understanding what heirs need (rather than what they "want").

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No question, this can lead to difficult, awkward (or even contentious) discussions. But this is exactly what creates positive outcomes.

Take action from a place of values
Contributing leaders have clear values–a set of guiding principles that form a code of conduct. The most successful estate plans I've seen are the ones where it's immediately obvious what those values are. You can trace a path from those values to specific bequests or estate planning structures/strategies.

So ask yourself: what are your financial values? Which of those values do you want to pass on to the next generation? What exactly do you stand for, and how does that translate into asset transfer?

Again, not easy questions. But the answers will lead you to an estate plan that protects not only your wealth, but protects the people you love. And not just for one generation, but for many.

Thane Stenner is founder of StennerZohny Investment Partners+ within Richardson GMP Ltd., as well as Portfolio Manager and Director, Wealth Management. Thane is also Managing Director for TIGER 21 Canada. He is the bestselling author of ´True Wealth: an expert guide for high-net-worth individuals (and their advisors). (www.stennerinzohny.com) The opinions expressed in this article are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Ltd. or its affiliates. Richardson GMP Limited, Member Canadian Investor Protection Fund.

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About the Author

Thane Stenner is founder of StennerZohny Investment Partners+ within Richardson GMP Ltd., as well as portfolio manager and director of wealth management. He is also founding member and chairman emeritus for TIGER 21 Canada. He is the author of True Wealth: an expert guide for high-net-worth individuals (and their advisors). More

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