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Show Page C4 THE DAILY HERALD, Provo, Utah, Sunday, Decembti 13, 1998 flousiflysfis s(5 sffl&Ddle shift m h&mm m stote Most admit that they would rather live comfortably in retirement, the surveys found. "I don't think there's a preoccupation, as there once was, to By THOMAS HUANG The Dallas Morning Newt Ann Allen, a retired accountant in the Oak Cliff section of Dallas, might leave something to a son upon her death. But, she said, "if I spent every dime I've got, that's fine. I was the one who DALLAS of: ld q . s, ' f assemble a large estate," said Pollan, the financial adviser and author. "We used to see it as a measure of success in life, but now we see it as nonsense." He argues that the elderly should spend their savings and give their children money while they're still alive. Loved ones won't get socked by estate taxes. And they won't end uji fighting over the estate. Clients who have built up their own wealth are increasingly the most cautious about leaving an inheritance, said Norman E. Ross, a New York financial and estate planning expert. worked hard. "They've and saved scrimped They've and sent the kids to' good schools," he said. They look at their children with concern. ... The kids have a lot of debt, big mortgages, the newest cars." He said many of his clients ask him, "Will an inheritance dampen my children's ability to make it on their own the way I did?" His clients, he said, "are concerned they'll breed the next generation of worked for it." In contrast, Doris Robertson, a greater importance on leaving a nest egg for her daughter. "It's natural to want to leave your child something that will help them," she said. Charlotte Flynn, 79, has a third opinion. She wants to see her three grown children enjoy their parents' money while she's alive. She and her husband regularly give them cash gifts. Some have used the money to fix up their homes. "Some (parents) are interested in preserving a legacy for their children," said Flynn, of Austin, Texas. "There are others who feel like they earned it and they want to spend it. And we have a halfwav position on that." 70, of Dallas, places I : AKR A " c V'" ;! KAREN STALLWOO. Dallas Morning News Inheritance issue: Ann Allen, a make it on his own," she says. "I retired accountant from Dallas doesn't consider leaving money to her son important. "He can got him the education that got him where he is. What more do I owe him?" Different times These differing philosophies reflect a subtle shift in atticontudes toward the cept of inheritance, according to financial and estate planners. Once, an inheritance consisted of the family business or family farm. Many families expected their children not only to enjoy the fruits of their labor but to carry on their work. That expectation is less common as family members scatter across the country and children, with more education and more options, go their own way. "Estates were very important when the guy who owned the castle had to leave it to his son to take care of the family," said Stephen M. Pollan, a New York financial adviser and coBroke" author of "Die (HarperBusiness, $14). 'Today, there's no reason for it," he said. "We acknowledge that the expectation of an inheritance does damage to a family. What does it do to your age-ol- d soul to have a stake in the death of a loved one?" It's not as if there's nothing to bequeath. Today's retirees of Great children the Depression who came of age have during World War II amassed a significant, perhaps historic, amount of wealth. Soaring stock and real estate values have helped many create large nest eggs more than $10 trillion by one estimate. "They remember the Depression, and they're holding on tight (to their money)," Carrie Coghill said of her clients. "Their children have substantial inheritances coming," said Coghill, vice president of the Pittsburgh investment firm D.B. Root & Co. Using it But most agree that this won't be the case for the average inheritor. Because of more healthful lifestyles and better medical care, many retirees are living longer than their predecessors. They're spending their savings on their own needs, bringing to mind a popular bumper sticker seen on RVs headed to Florida: "I'm spending my children's inheritance." "The wealth is there," said William Sterling, head of global equities for Credit Suisse Asset Management in New York. "The question is: How much will they spend, and how much will they pass on to their kids?" Growing discussion about inheritance issues stems in part from anxiety that some baby boomers are feeling as their parents' generation enters its twilight years. More and more boomers are grappling with the emotional and financial complexities of inheriting their parents' property after ineffective planning. Divorce and remarriage also, thing I had in mind before my have complicated the process. daughter was born," said Robertson of Dallas,, who "My advice to people doing estate planning is: Don't be retired as an administrative assistant in the Department of secretive," said Margaret, a librarian. She asked Defense. Others are more circumthat her last name not be used because of the turmoil her famspect. "I don't think it (an ily experienced in dividing her inheritance) is really imporparents' estate. "The whole tant," said Allen, the retired thing has been hurt feelings accountant. "He (her son) can and misunderstandings, with make it on his own. I got him blame thrown at one another." the education that got him where he is. What more do I owe him?" She said her son has Touchy subject It's a difficult subject for told her: "Spend what you've most families. "People are still got. You enjoy life." very reluctant to do what's necTime for me essary (in estate planning)," said Michael a Wald, Though most retirees still intend to leave an inheritance, Richardson, Texas lawyer. "Things are going OK, and they that majority has declined from don't take the time to be as 80 percent in 1995 to 66 perproactive about it as they cent in 1996, according to surshould. veys by the Equitable Life Many, of course, still view Assurance Society, a financial leaving an inheritance as one of planning company in New York. their goals in life. "It's some ne'er-do-wells- ." Instead, many parents are beginning to place greater emphasis on providing their children a college education, said Dan Rottenberg, author of "The Inheritor's Handbook" (Bloomberg Press, $23.95). "What's the best and wisest legacy or inheritance that parents can leave to their children?" he said. "Since they don't have $100 million estates to pass down, they're trying to get their children the best possible education they can, at the most prestigious colleges." But for Flynn, all this talk about finances misses a larger point. "When you talk about legacy, there's another kind," she said. "You hope you give your children a legacy of values that will help them become a better person and help them to provide for Resolving conflict is the first priority before passing on the family business ness inherit the business assets? Should the other two, who work By THOMAS HUANG The Dallas Morning News DALLAS As a teen-age- as professionals outside the business, inherit the personal r, Michael Bracken defied his father. He bristled at every suggestion and resisted working weekends at his parents' plant nursery on Lovers Lane. It wasn't until 1988, after earning a business degree and working in Arkansas, that Michael decided to join his parents at Nicholson-HardiNursery and Garden Center. With greater maturity, he realized he had a tremendous opportunity to learn how to run a business. But the tension between father and son persisted. Their disagreements at board meetings resembled their arguments over the dinner table. The bickering threatened to undermine the busiand the ability of ness Michael and his brother. Josh, to carry on their parents' life work, family members say. property? What would be fair? "There's no easy way to deal with any of this, other than getting people to talk about it" before any changes occur, Voeller says. KAREN STALLWOO Dallas Morning News All in the family: The Bracken brothers say their parents address conflicts before handing over their family business, a garden center. MassMutual. Family disputes could derail many of the companies during that transition. "If you have unresolved family problems, it's like sticking a blasting cap into a stick of dynamite," says Dr. Mark Voeller, a Dallas organizational psychologist. A family and marital therapist since 1975, Voeller started working with family businesses have escalated to the point of us not having a strong line of communication," says Michael, man 35, an intense, with graying hair and octagonal eyeglasses. "It certainly wouldn't have been good for business." in the In 1994, he founded Dialogue 2000, which consults with companies on leadership and management. His own family has owned a farming and ranching business in North Dakota for three generations. That's a rarity. About seven of every 10 family businesses Shifting control Even as retirees and their don't survive into the second generation, according to the U.S. Commerce Department. One study found that strained relationships caused many of the failures. soft-spoke- n children confront the emotional and financial complexities of estate planning, busimillions of Nicholson-Hardinesses such as are about to go through a major shift in control and ownership in the next decade. Of the 14.4 million businesses in the United States, close to 6 million will change leadership in the next five years as company heads retire, projects a 1997 study by and Andersen Arthur baby-boom- family-owne- d mid-1980- e family-owne- d 'the Michael and Josh will own the entire company. The Bracken brothers say they're glad, their father had the foresight to resolve family and business issues before he handed over control. "Yeah, it's rare," says Josh. "So many of my friends are in family businesses, and they are on the verge of this (power shift) happening. But you don't bring it up. It's the unspoken. ... "I know businesses where the parents are in their 80s, where they won't discuss the busi-- j ness," he says. "I have a friend in the third generation (of a family business) who said there won't be a fourth generation. "The parents won't discuss estate and succession planning, and taxes will eat this company alive. Unfortunately, that seems to be prevalent in family business." look."' interpreted his father's suggestions as He felt threatened. He would withdraw. Now he realizes his father was simply thinking out loud. Michael second-guessin- e "The level of conflict would Michael would be throwing (figurative) punches, and Mom and I would be watching." "You could see the door clos(Michael's) body laning guage and eye contact," says his mother, Linda, 59. "Michael would give you what we call Not worth it And family feuds have proved costly. In Dallas, for example, four brothers fought for control of Box Energy Group after their father died in 1993. They sold their majority interest after spending millions of dollars in legal bills. In Phoenix, two factions of the trucking empire battled each other until a court order forced one side to file for bankruptcy. "If the family could set up, right from the beginning, the rules of transition from one generation to the next, it would make it so much simpler," says Dr. Joan Robertson Cross, a family therapist and business coach. "But they usually can't do that. ... Often, the older member, the father or mother, cannot go away. "In so many families, the issue of power is inherent in the parent," she says. "The father starts the business. He is the powerful one. The entrepreneur. He's made the money. Always, the children are going to see him as a very powerful figure. Frequently, they'll call him controlling. ... "Sometimes (the parents) are unaware of how much power they have and how they are not empowering this younger generation that's coming after them," she says. Voeller sees his share of struggles in family businesses. One family he is working with has five grown children. They are wrestling with the parents' estate plan. Should the three children who work in the busi billio- n-dollar One family's approach The Brackens are trying to beat the odds. Three years ago, they approached Voeller for help. John Bracken, 60, who in bought Nicholson-Hardi1974, says it isn't in his nature to visit a psychologist. But "it's the best dollars I've ever spent," he says. John realized that he must let go of the reins. He has retired from the company but still attends quarterly board meetings. Ever the entrepreneur, he has started a business in Meridian, Texas. "Anybody that cares about something so much that they put their heart and soul into it, it's hard to walk away from it," he says. scenario is 'The worst-casthat I would've ruined the family," he says. "My family is very important to me. ... We all know children who don't talk to their fathers, to their mothers. Brothers who don't talk to each other. My family was more important to me than the business was." The Brackens have learned how to communicate better Each with one another. responds to stress in a different way.. They must recognize that when working with each other under pressure. Michael used to get frustrated whenever his father threw several ideas at him after they'd already agreed on one approach. "It would revert to the way we were as kids," says Michael's brother, Josh, 30. "Dad and e plant-growin- e g Different angle Josh joined the company a few years ago after working in the hotel and restaurant industry. He says he posed a different challenge. Ever the jovial character, he would agree with his but not follow through dad on what he said he'd do. "I knew to say, "Yes sir,' and then not do it," he says. "I would say whatever he wanted to hear and do my own thing." He rJirtiiiR?3i!rsL.tgrn says he has had to learn to take on conflict, not avoid it. During board meetings, the Brackens now try to keep family and business issues separate. And they've mapped out a long-terbusiness strategy. Michael and Josh run the plant nursery as Each year, their parents, who still own a majority of the business stock, hand over a greater share to the sons. Eventually, 3 Diaper Depot "Utah County's Diaper Outlet" Quality Disposables Now carrying Various Brands Less Than Wholesale Prices We Deliver! Join our referral program and earn FREE diapers 1890 W. 820 N. Provo, UT )Mt llouni N. Biulnn. Park) M-- F 577-BAB- Y 11-- SAT IO-- 2 rs ' ; |
