The Cycle of the Gift: Family Wealth and Wisdom

Praise for The Cycle of the Gift "A generous spirit and crystal-clear values are the foundation that protect a family from spiraling into dysfunction and entitlement. The Cycle of the Gift is the perfect blueprint." —Charlotte B. Beyer, founder and former CEO, Institute for Private Investors "This is a remarkable book. It truly helps illuminate the issues and breakthrough conversations that families can have around giving to their children and grandchildren." —Charles W. Collier, former Senior Philanthropic Advisor, Harvard University "The authors have given the reader much to consider–the spirit of giving, the desired effect when making gifts, and the function of the gift over the form. Like Family Wealth , this book puts a spotlight on the most important questions for family members to contemplate when making gifts and offers the potential for completely different outcomes from the experience." —Sara Hamilton, founder and CEO, Family Office Exchange "With thoughtfulness and clarity based on a multi-discipline collaboration of considerable expertise, the authors challenge readers to mindfully consider the dynamics that occur between a gift giver and the recipient. The Cycle of the Gift is an invaluable resource for both individuals and the advisory community." —Dr. Lee Hausner, Managing Director, First Foundation Advisors " The Cycle of the Gift is a must-read for affluent families. It deals with one of the most difficult and profound issues: how much should I gift and what process should I follow? It provides powerful insights to help family members become mindful givers and receivers." —Mel Lagomasino, CEO, GenSpring Family Offices "This extraordinary book is a gift. Its contribution is helping us understand the complete cycle of any gift. The true gift of this book and of its writers is turning awkward situations and even pain . . . into joy!" —Thomas R. Livergood, CEO, The Family Wealth Alliance "The best learning comes when a book is able to take something that you do and consider important, and guides you to step back and look with fresh eyes. The Cycle of the Gift takes the process of gifting, a foundation of all society, and takes us on a journey to understand its deeper nature." —Dennis Jaffe, Saybrook University "These well-versed authors offer a golden blend of technically astute practical guidance and the foundational spiritual and classical knowledge of wisdom, discernment, and counsel." —Paul G. Schervish, Professor and Director, Center on Wealth & Philanthropy, Boston College "Families with wealth face a great and persistent challenge: how to give to children and grandchildren in ways that enhance their lives rather than create dependency. The Cycle of the Gift faces this challenge squarely with sound and prudent counsel. If leaving a legacy is important to you, this is a must-read." —James P. Steiner, President, Abbot Downing, a Wells Fargo Business

Preface xv Acknowledgments xix Introduction xxv Chapter 1 The Elephant in the Room 1 Grandparents’ Checks 2 When Giving Becomes an Opportunity 4 Chapter 2 The Spirit of the Gift 7 Where the Spirit Leads 11 The Who of Giving Chapter 3 Becoming a Wise Giver 17 Know Thyself 18 How Much? 21 Guilt and Remorse 24 Nothing Too Much 26 Chapter 4 Receiving Wisely 29 A Bad Investment? 30 The Psychological Stages of Giving 32 Giving and the Work Ethic 36 Not Yet 39 Meteors and Resilience 41 Investing in Recipients 44 Chapter 5 Spouses 47 Learning from Yourselves and Each Other 47 Three–Step Process 48 Blended Families 50 Prenuptial Discussions 51 Fiscal Unequals 54 Chapter 6 Grandparents 57 Grandparents’ Great Opportunity 57 Involving Parents 58 Grandparents and Philanthropy 61 Chapter 7 Trustees 67 The Choice of Trustee 67 The Type of Trustee 69 The Relationship between Beneficiary and Trustee 69 A Regenerative Role 74 Chapter 8 Elders 77 Intergenerational Dynamics 78 Growing Elders 79 The Work of Elders 81 The How of Giving Chapter 9 Control versus Freedom 87 The Myth of the Free Gift 87 Cui Bono? 88 The Giving of Accounts 90 Letting Be 92 Chapter 10 Fair versus Equal, Separate versus Together 97 The Balancing Act 98 Pot Shots 100 Flourishing 102 Promises 103 Chapter 11 Giving Outright, via Loans, or in Trust? 107 Options 108 Sharing the Spirit 108 Making Loans Work 109 Why Trusts? 110 The Family Bank 113 Form versus Function 115 The What and Why of Giving Chapter 12 What Families Give 121 Homes 121 Business Interests 125 Values 131 Rituals 134 Reputation 136 Chapter 13 The Why of Giving 141 Why Not 142 The Family Tree 144 Giving Thanks 146 About the Authors 151 Index 155

James E. Hughes Jr., Esq., is a resident of Aspen, Colorado, and a retired attorney. Jay is the author of Family Wealth: Keeping It in the Family, and of Family–The Compact Among Generations , and numerous articles on family governance and wealth preservation as well as a series of "Reflections" which can be found on the Articles section of his website jamesehughes.com. He was the founder of a law partnership in New York City and has spoken frequently at numerous international and domestic symposia. He is a member of various philanthropic boards and a member of the editorial boards of various professional journals. Dr. Susan E. Massenzio is a psychologist and founding Associate of Wise Counsel Research Associates, a think-tank and consultancy. Susan has extensive experience consulting to senior executives, leadership teams of Fortune 500 companies, and heads of family businesses. Susan served for many years as the senior psychologist for John Hancock Financial Services, a senior vice president at Wells Fargo Family Wealth, and professor and program director at Northeastern University. Susan is a member of the Collaboration for Family Flourishing. Dr. Keith Whitaker is an educator and founding Associate with Wise Counsel Research Associates, a think-tank and consultancy. Keith has many years' experience consulting with advisors to and leaders of enterprising families. Keith served as a managing director at Wells Fargo Family Wealth, where he founded the innovative Family Dynamics Practice. He has also served as a researcher at the Center on Wealth and Philanthropy, a private trustee, a director of a private foundation, and a philosophy professor at Boston College.