Each of us will leave a legacy of some sort, whether we plan for it or not, whether we have children or not. No matter what you accomplish in life, or how much or how little you accumulate, one thing is certain:
Whether by choice or by chance, you will leave something behind.
The desire to leave a significant legacy is extremely powerful. Whether the estate is that of a pauper or a prince, the driving force behind estate planning has always been to provide for the future, to ensure that after you are gone your loved ones will have basic necessities like homes, medical care, and education.
In their new book, Beating the Midas Curse (Heritage Institute Press, 2005), authors Rod Zeeb and Perry Cochell present a compelling and frightening picture of the traditional estate planning landscape in America today. Their conclusions, based on personal experience and years of industry analysis, are keeping a lot of successful people awake at night. Simply put, they say that the more financial success you achieve, the greater the probability that your family is headed for disaster. And there's more bad news: according to the authors, the traditional estate planning tools and services that most of us rely on to provide for those we love can actually increase the likelihood that they will face family and financial chaos--for generations to come.
Their chilling conclusions aren't made from the isolation of an academic ivory tower; Cochell and Zeeb are two of the best-known attorneys in the nation. They have provided estate planning and inheritance counseling services to thousands of families, including several dozen of the nation's wealthiest families (the $1 billion dollar and above club.)
Unfortunately, say Cochell and Zeeb, the legacy you want to leave your family probably won't be anything like what they will actually receive, no matter what your will and other legal documents say. Why not? Because there really is an upside-down world, where a ninety percent failure rate is the norm. It has existed for years. And, dominated by the combined forces of inertia and tradition, it continues to this day. Because of it, relationships will be broken, families destroyed, businesses devastated, and fortunes lost. Ask an auditorium filled with financial planners and estate planning attorneys if this world exists and you'll see every head nod in agreement. Cochell and Zeeb hammer it home with this statement:
Ninety percent of all traditional estate plans will fail. Period.
A ninety percent probability of anything happening makes that event an actuarial certainty. Fortunately, the chances of having to stare doom in the face on a daily basis are pretty limited. It goes against human nature to suggest that any of us would set out to get married, build a house, start a business, have children or do anything else important knowing there was a ninety percent chance that we'd fail.
Consider estate planning. If there is one area of your life where you really want to hit the bulls-eye, it's here. We try to share our dreams, our hopes, and our most important values with those we love while we are alive, but we also have an instinctive desire to provide for our families after we're gone. We want to leave a legacy that provides meaning, not just money. Plus, we want to know that our lives meant something, that in our passage through this world we made a difference.
In the next article in this series, we'll examine the causes of estate planning failure, and the wreckage it causes among families. In part three, we will look at how all families, no matter their financial condition, can combat the effects of The Midas Curse, and become healthier and stronger for generations.
Over the next several months, I will be taking a close look at their work, with a particular focus on the remarkable process they have developed to combat what they have dubbed the `Midas Curse.? (Just as in the ancient Greek myth of King Midas, this book does have a happy ending.)