Mark Clemons, Author 

A Legacy of Richness and Service Stewardship     

The first duty of the trustee is to study and become thoroughly familiar with the provisions of the trust instrument and thereafter to follow them out implicitly. 

These are words that are familiar to every new trust officer. The fiduciary industry has taught that the trust document controls our fiduciary duty and professional behavior. Following the terms of the trust document is “fundamental” to proactive risk management. Yet it is often the successful implementation of the “personal” estate plan that leads to a lasting legacy and life of richness for the client, and a risk averse fiduciary experience. The roadmap to this kind of success is often found outside of the borders on the trust document.

The opportunity to establish the framework for the family’s personal growth is found during the planning stage. Unfortunately, the opportunity can often be missed if the sole focus of the planning is centered on “financial capital”. Instead, by expanding the discussion to account for “human capital”, you can increase the likelihood of creating a healthy relationship and a lasting legacy.

Why is this important? It doesn’t take long working with high-net-worth families to realize that something distinguishes families that become pillars of the community from those who do not. Repeatedly, we see families with strong financial capital who fail in family relationships. In these cases, monetary growth does not translate into happiness and self-worth. With the “emotional piggy bank” broken the family realizes that the abundance of money does not make them “rich” in the areas that matter most.

Instead, if you ask wealth creators what they want to pass on to future generations, they will quite often cite such intangible attributes as success, fulfillment and personal achievement. They hope to help leave a legacy of a family rich with respect for history, brimming with family interaction and mired in a deep sense of social responsibility.

As elusive as these goals may appear, several common contributors to success emerge when you view families who have been successful in this pursuit. First, successful families nurture service leadership. Leadership inspires achievement and these families seem to know that contributions to this emotional deposit account are important and encourage future generations to do the same. When we look more closely, we see that these deposits often take the shape of community and charitable investment. These families have learned the value of working together and helping others.

Second, we see that successful families have a healthy, professional relationship between the beneficiaries of the legacy and the trustee charged with the stewardship of the family wealth. This goes well beyond the professional duty of loyalty. It is steeped in personal connection as they work together to become the guardians of the future.

The trustee’s stewardship plays a vital role in protecting and developing the legacy for future generations. And, while the fiduciary industry is comfortable and effective in financial capital investment, more is needed. By also focusing on personal involvement and cultivation of personal responsibility of the beneficiaries the trustee sets a high standard and helps guide the way for personal growth and wealth.

My proudest and most humbling moment over a 40-year career came at the 90th birthday party for the patriarch of a personally and emotionally rich family. As grandson and beneficiary to the grantors of an irrevocable trust established in the 1930’s, he carried forward every attribute of richness. His lifetime of community investment and service leadership only begin to tell his and his family’s story. Yet as he thanked the guests at his party, he took pause to make clear that his life was made possible by the rich family lessons provided by his grandparents and parents and the preservation of their wishes by the careful stewardship of the corporate trustee over the past 70 years. It was a stewardship that had stressed personal involvement and had helped to cultivate personal responsibility. The investment in human capital had helped to make this possible. As the last of a long line of relationship managers and trust officers I was blessed and honored to be a part of that legacy and to attend that wonderful party. It is a moment I will never forget.

A trustee’s success is seldom defined by their investment products, prices and performance. Other providers have similar stories. Instead, it is how the trustee treats its customers and what they do to foster a close relationship. The trustee that invests in human capital, seeking to enter an enduring relationship with the family, is most recognized as the family’s guardian of the future.

These rich relationships lead to much more than money. As professional architects of a legacy plan, planners and fiduciaries alike bear a responsibility for the future stewardship and preservation of family wealth. Time invested in that goal is time well spent.