In this podcast, family wealth expert, James Hughes, talks about:

  • Three things any owner can do right now to prepare for a succession;
  • The functions for each member of a world class transition team;
  • Finding a second-in-command for your business and your personal life;
  • Wealth transfer and preservation between generations; and
  • The difference between transfers and gifts.

About the Guest

Mr. Hughes, a resident of Aspen, Colorado, is the author of "Family Wealth: Keeping It in the Family," and of "Family - The Compact Among Generations," both published by Bloomberg Press. James is also the co-author, with Susan Messenzio and Keith Whitaker, of a new book, "The Cycle of the Gift: Family Wealth and Wisdom," to be published by John Wiley & Sons, Inc. He is also the author of numerous articles on family governance and wealth preservation as well as a series of reflections which can be found on his website jamesehughes.com.


He was the founder of a law partnership in New York City, specializing in the representation of private clients throughout the world and is now retired from the active practice of law. He is a frequent lecturer for and member of the Purposeful Planning Institute. He is also an early member of the Family Firm Institute and has lectured for them at a number of their annual gatherings.

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Noah: I’m so pleased to have you with us today listening to the Divestopedia Exit Strategy Podcast. Today’s guest is James E. Hughes, Jr. He is a philosopher of the family, author of three wonderful books and a now-retired sixth-generation attorney. Jay, thank you so much for joining us today.

James: Noah, it is a great pleasure and to all of you who are listening in, I trust that this will be helpful to you in some way and hope that it will be.

Noah: Great, I’m sure it will. Maybe we’ll start Jay - you’ve written on a variety of topics dealing with family wealth but specifically our audience are business owners who are thinking about an exit. Maybe you could tell us from your perspective what three things they should be doing right now to get prepared.

James: Well, Noah, I think that the beginning of any important process in one’s life requires understanding that one is putting a whole system into transition. Life is about linked transitions. It’s not about successions.

I think the first thing that an owner can do when they begin to think about exiting is to imagine the question as a transition and, as I said, the entire system, moving. Now what do I mean by that? I mean that they will be putting their family system into movement. That is, all of their human relationships with those that they hold most dear. They will be putting the ownership of an enterprise into movement. That means its board, its customers, all of the things that make up that system, and it will be putting its management into movement.

In thinking about that transition and movement of the gears as if it were the gears of a watch, what I would say to the owner is that the most important of those movements is the family system and the transitions that are going to occur as that human being changes his or her relationship to the family system. Equally important - well, not equally - less important is to the board and least important is to the management. That would be the first thing I would say, is to recognize that a whole system is going into transition not that an asset is being sold.

The second thing I would say is that I think that for owners of enterprises, reading a book called The Hero’s Farewell, by Mr. Sonnenfeld, is always useful because it defines so beautifully the four paths that almost always match the path that an owner is on as a human being and the consequences of that path. This isn’t the time to sort of go further with that book but I would say that I have, Noah, for many years when individuals I was helping when I was active were contemplating an exit, I have asked them to read that book.

I think the third thing I would say is that it is extremely important that the owner have retained counsel. It doesn’t have to be legal counsel but a counsel, a serious counsel in the highest sense of the word, for the management of all of the transitions of those systems while the owner is engaged in a financial transaction, which has its own life. The reason I say that is that in the life of the family, the entry of the business and the exit of the business are simply an event, but the knowledge and understanding that all those systems are in movement and keeping the owner aware of the movements of transition of the three systems will mean that the day that the transaction is completed, his life or her life will already have transitioned to where it is going, and the financial transaction will not be an end that requires a beginning but rather a point in that process of transition.

This is the human, humane, way for the deaccessioning of such an asset and I must say tragically it is almost never practiced in the way I have suggested.

Noah: Unfortunate but true and I think that’s the reason we’re doing this podcast, is to try and bring this information to owners. I think they are somewhat information starved but certainly they’re clearly action starved so if we can give them some guidance that would be great. Maybe to that point in talking about retaining counsel for managing the transition of these systems, where should they start? Maybe I’ll propose, you know, my partner in business who is a certified exit planning adviser. He obtained that designation to try and put himself in a position to get noticed for that type of work. Me, on the other hand, I’ve been working with owners for my entire life and helping them with these types of transitions and it’s been my philosophy, but I don’t know where owners search to find this help.

James: Well, there’s an old saying, Noah, that you will not find the help you seek if you don’t put the question out in the first place. By the way, putting that question out in the first place doesn’t mean uttering the words. It means having sat patiently which is very difficult for most entrepreneurs in the first place, but to sit patiently and think through the question of the passing on of one’s dream, which in it such an enterprise often is, to another, as a transition in a life and to make that dream continue to grow, as opposed to a cutting off or succession and financial transaction.

If the owner is willing to do that, it almost emerges - I don’t see how it could not emerge - that the owner recognizes that he or she is seeking a person to guide them through that transition, which means an awareness of the entire system, as I said in my answer to the first question, which is composed of these three interlocking systems, and helping the owner be able to know that all of those systems are going to transition well. I think, Noah, it must come from an interiority. It must come from an interest in the question. I think we can say that many owners that we’ve known have some dislike of consultants, feeling that they just interfere, they don’t really add. That’s perfectly natural. That’s probably their experience.

This is a transition they have never been in before by definition, and so in a way that they have attempted in the past to do things themselves, which is almost the defining characteristic of an entrepreneur who has founded a successful enterprise, it’s not native to them, even not natural necessarily to them to seek someone of this type. Yet if they can take the interior journey, consider the question and see that this is a transition in the lives of all these systems then I think the natural thing is to say, "Well, now I can find someone to help?" All I can say, Noah, is it is in that action by a human being into the universe - into the world - I seek this help that that help will appear. I’m not being mystic. It’s exactly my experience.

Noah: I call that the role of the universe.

James: It is the role of the universe but you have to ask with intention.

Noah: I’m with you 100%.

James: Not ask because somebody said you need a shrink or somebody said you need a consultant or somebody said this or that. No, no, no. You have to have the intention that that person will appear. If you have that intention, I think that person will appear.

Noah: Yeah, I wholeheartedly agree. Maybe in terms of the tactics of recruiting that person, once you find them and bringing them into your trust and making them that personne de confiance that you refer to, is there any way to create a process to get to that point or do you think it’s like any other human interaction - it takes time to sit together in a personal connection?

James: I do think there’s a process, Noah. Most of the people in commerce, in some fashion, are engaged in a daily series of quantitative activities - measurement and then the implementation of what the measurement reflects - so most of one’s experience when we’re dealing with enterprise is quantitative. In fact, the initial dream that brings the enterprise to life is entirely qualitative, but very often that part of the life of the entrepreneur has so far retarded or disappeared in a sense, that the experience is seeking qualitative assistance is very complicated.

Now, what do I mean about the qualitative? In my hundreds and hundreds of interviews over the years and experiences with owners of different types, I find that very early in their careers they all had mentors. Not coaches but mentors. Now, very often they haven’t identified those people in years as mentors but they have all had them. If I can help them recover the early experiences of their business lives or lives in some other field in which they did find a mentor and they engaged with that mentor and they learned how to be mentored, then they actually have already experienced the process of finding such a person.

Now, I am not suggesting at this stage of their lives and the deaccessioning of a dream or the materialization of a dream that they are seeking a mentor. They are not. They’re seeking a personne de confiance. That is someone to be a great number two who will help them through this transition and into the future remain a great number one. That is what they’re looking for, but my experience, Noah, is in helping people rediscover that they already have a process in a certain sense, or they’ve experienced the process and then help them use that process to begin to look for such a person for this particular transition in their lives. If people are interested in understanding what a mentor is or what it does, they can go on to my website, which you can give later on, where there are some articles on the question of the nature of a mentor, the trades and characteristics of what this means, that might again awaken some recollection that they have.

It is an understanding that they are seeking a qualitative person, a person who understands the human and intellectual and social aspects of their system and much, much more importantly of them themselves and are prepared to help that person and their human, intellectual and social systems evolve successfully so the financial transaction works within the evolution of their human intellectual and social systems rather than being seen to be something separate, apart or perhaps the only thing that’s going on. Does that help?

Noah: Very helpful, yeah. Since owners tend to be quantitative when approaching their exit and I think you’ve referred to the, you know, one part to three parts quantitative to qualitative in some of the things that I’ve read.

James: That’s right.

Noah: That proves true with me in my counsel to families that are going through this transition when we talk about wealth. I think wealth is one of those areas that’s so easily quantified in the financial sense that people tend to hold on to that tree. Maybe you could give some advice to owners about how they might prepare emotionally from earning money or what I refer to as wealth accumulation to now being in an area where they’re spending money, what I refer to as wealth utilization?

James: Noah, one of the major transitions that occurs with - or the parts of a major transition that occurs with such a transaction - is very often the monetization of this dream. The dream became material at some point during this person’s business career and it materialized substantially so that there is in fact value and value will come away from the table. The monetization of a dream is something that very few people talk about but it must be understood in these transitions that the owner is selling a dream, not a business, and because that is how it came to be in the first place. That’s how it manifested.

The transition from emotionally and in this financial transaction is very rarely understood as not the sale of bricks and mortar and customer list and excellent human capital in the form of employees. It is all of those but that isn’t what’s happening. That’s only a fragment of what’s happening. What’s actually happening is within the family of this individual and this individual him or herself, there is the sale of a dream. Now that means almost always that the mourning process of this selling of a dream does not take place. Rather what happens is that the moment that the monetization has occurred, the individual is overcome by persons who want to help manage the financial result.

Also, another hidden aspect of this that Noah, you and your partner know very well, is that very well often at that time of the transaction’s completion, along with the sale of the business go the closest friends and advisers of the individual because they’re going to stay with the enterprise, maybe even obliged by golden handcuffs, and so the individual loses connection with many, many of the most important people in his or her life. Sometimes - I have to say this honestly - people far more important than their own children and husbands and wives, because of how the dream that they brought to life has manifested.

The emotional component of this transaction must be seen to be enormously complex because it isn’t money passing from one hand to another and assets going somewhere else. Sometimes it is but rarely in my experience and never - I’ll use the word very carefully - in my experience is the first enterprise that the individual is on for 20 or 30 years. No. What’s happening is a major transition in which a stage of life, the ownership of this dream and its manifestation is being completed, and the completion of something always carries with it mourning. We don’t just all stand up and sing kumbaya and continue with life, we don’t.

This mourning question is awareness of loss rather than to what the world appears to be great gain is almost always missed, and the great personne de confiance - the great qualitative adviser - stands ready to hold space for this selling owner to do the work of completion, which includes whatever mourning is necessary. That means holding away all the people who have good ideas for this person about how to use the money.

Now I also want to say that most of the great wealth owners I’ve known who are self-created - that is, they have manifested this dream and they have nurtured it and now they are transitioning it - have a great disdain for financial assets, a disdain for them because they appear to be assets which do not represent work but represent sort of a dilettantish passing around of certificates. They also have an emotional component which is - now , what does that actually mean? The disdain is real but it is also the masking of fear that for the first time in their lives for perhaps 20, 30, 40 years they’re going to be asked questions by people they really don’t like to be with, for which they don’t have the answers.

For the first time in their lives, in fact with their children - particularly their children - in a place where they’ve always had answers, and now they have to actually admit to their children that they don’t know. Of course, tremendous mistakes get made by people who have not mourned - this is the emotional component - have not learned how to understand risk in a different financial area, and who are trying to answer questions of their children that they don’t have answers for. It’s an emotional mess but it doesn’t need to be, because if as the owner is beginning to imagine a transition - I come back to my first answer - seeks a person who understands all of these elements, of what is in fact likely, not will but likely to happen during that transition, it doesn’t mean they’ll get it right. It doesn’t mean there won’t be some suffering. It doesn’t mean there won’t be some confusion. It does mean that they’ve put in place the means of putting a very strong foundation under that process so those confusions, those emotions, the realities of a new life are not being dealt with without a foundation under them, the foundation under them being the person who is helping with this transition.

I apologize for a very long answer but this is an immensely complex issue and it is almost never seen, much less addressed.

Noah: Maybe in the interest of time and in making sure you provide the most value to our listeners, maybe you can share some stories with us and infuse into that some of the ways owners have maintained family harmony and discuss their ideas with their family, and maybe even how they’ve handled the monetary side, the quantitative side of the transaction, where maybe their children have become financially wealthy through the transaction because of trusts or gifts or other means that the parents have provided for them. If you can talk to me maybe about an owner that has done some of these things right and some of our listeners might be able to have a mentor in that sense, of another story they could relate to. Can you share something with me about that?

James: Yes. In this field, we have a description of a certain state of mind and result. It’s called grantor’s remorse. I’ll tell the story this way, and this is obviously a true story.

About 15 years ago, a couple asked me to come and talk with them. I had been introduced and I said, "Okay, I’ll do that." I went and I sat with them. These were people who had spent about 20 years manifesting a dream in a corporation - it became a public corporation. It was another person’s dream but they were very instrumental, one of them particularly, in this dream manifesting. In the course of that manifestation they had a very, very big run-up in value through the initial public offering and in the secondary offerings. They had been hard-working people and the first generation type people and suddenly they were second-generation people with a financial fortune to preserve.

In the course of the planning for this very large uplift in value, they created some trusts for their children. They did them at the lawyer’s suggestion in order to have a big saving of capital gains tax, a big saving of estate tax. They created the trust for children who were then quite young - I won’t say how young but substantially in their minority - and lo and behold, there was a big uplift and these trusts became very substantial for the children, irrevocable trusts of course, totally met all the tax and other requirements, a very common thing at such a moment. Also they created a foundation because somebody said they were giving, nice people and they don’t have a foundation so they created that too. That also had a nice uplift. Great success all around - the lawyers, the accountants, the bankers, everyone cheering, but they sensed that something wasn’t right, a little bit like Ms. Clavel and the wonderful children’s story who turns on the light and says it isn’t right in the Madeleine’s story and rushes upstairs.

They called me and asked me and I went. They said, "Something isn’t right - What isn’t right?" I said, "Well, do you realize that you have now essentially given each of your children so much money that they can do nothing for the rest of their lives?" "What," they said. I said, "Yes." Then came grantor’s remorse. We’ve spent the last years together working on a process to try to make those trusts gifts to their children rather than transfers created by lawyers. Now, transfers lead to remorse because they almost always do harm because no one has considered actually at the time of the creation of these structures - it happens with limited family partnerships, by the way, all the time too - no one has actually considered what happens to the beneficiaries or the limited partners when these events occur, what happens to the family system, what happens to the parents - role as parents or grandparents. What happens? Nobody considers that.

With the result that in most of the families, these things don’t work. They don’t work not only because the people who receive the benefits of these have no experience or preparation whatsoever for receiving those benefits, nor do they have any choice in the people with whom they’re put into relationship, who manage those benefits, which is of course, also unsatisfactory human relations. The result, Noah, is that most of these transactions end up very badly. That’s why - and I’ll give you two statistics - that is why over, at least now, a dozen interviews of more than a hundred beneficiaries at a time in rooms, 80% say their trusts are a burden and not a blessing and is also why in the Preparing Heirs book that Roy Williams and Vic Preisser wrote, they discovered that of 2,500 transitions of enterprises - they called them successions - 70% failed. Seventy percent of those transitions failed. Why? Because nobody thought about life afterwards. Nobody thought about the joint decision making processes that families had to develop, because now they had all these relationships. No, nobody thought about it.

There are families that have thought about these things very seriously and far in advance. By the way, that is how the Rockefellers, the Houghtons, the Sorrels, the Lodges, the Cabots, the Laird Nortons - I could go on and name the great, great families of America that are in their fourth, fifth, sixth and seventh generations. They didn’t get there spontaneously. They got there because the first and second generations considered deeply as the deaccessioning of the first generation’s dreams occurred, how not to have grantor’s remorse and how to have beneficiaries, limited partners - whatever you want to call it - family members who actually knew how to live inside of the roles they were cast in as that dream manifested. Those are the stories that I love. They were stories that practice what I’m talking about this morning.

Noah: Where have you found owners to get a good starting point? Is it start by asking the question of, you know, "Who’s going to be my number two that may be a great number one after I’m no longer CEO?"

James: No. I’m going to be a bit hubristic here with no intention of being. I can simply say that if your listeners read my first book, and since I’m a fully retired person and royalties are next to none, I’m not selling books. My very first book called Family Wealth actually describes wealth as human capital, as intellectual capital and social capital, with financial capital the least important but enabling the growth of the others, is a very, very good place to start, which is why I wrote the book. I say that, Noah, because I don’t know a better place to start. I’m sure there are better places to start. I just don’t know them. I hope that doesn’t come across hubristically. It isn’t meant to be. It is simply that my experience of the book’s life since I wrote the first edition of it in 1997, is that is has the effect for people of opening up this conversation in a very gentle way.

Noah: I will agree with you in that when I read it I found it being helpful to me in either creating a dialogue with owners or even internally, to position these types of thoughts with owners if they’re not intending to read it themselves. It’s a great resource and I appreciate you putting it out into the world. It’s been very valuable to me and I’m sure thousands of others.

James: Thank you.

Noah: Have you another story to tell us that you think would be either a shining example of a way that a family has handled this transition or kind of in the opposite, a failed transition where, you know, the writing was on the wall had they had the right person been looking?

James: Let me see if I could come at it this way. The stories that I have of success are stories where the wealth creator recognized that this was not the sale of a business, particularly recognized that he was not going to be called back by that business because the new owner wouldn’t make it work, which is an entirely failed story that I have too many volumes about. Those are failed stories and I want to just see if I can tell it this way.

This is at least a dozen, I’m just thinking of the names, of their faces, as they’re flowing through my mind, Noah. The owner, having brought forth this dream, nurtured it and now materializing it, believes that no one on earth can actually succeed with this enterprise other than he himself. He goes through the transaction - because something’s happened in his life that it has necessitated - but essentially goes through it with the intention that he will be called back by that enterprise to fix the problems. This is common in the family members being in the second generation management and being sort of ultimately the father comes back and says, "You’re all useless," or there was pretty good management but the sale isn’t really a sale in the mind of the seller. It’s only an opportunity to monetize what he expects to get back into again.

Every one of those transactions failed, so the ability of the owner to decide to sell in the first place, if it isn’t an honest action in which he or she believes that others are now ready to take up their dreams and grow them from there in the life cycle of that dream that becomes that enterprise, it’s a failed transaction. It’s certainly not a transition, is it? It’s a suspended action. I just have at least a dozen cases where this was the case and none of these worked. The rare owner who really intends to dispose of this intentionally, because he or she sees the possibility for the enterprise in other hands being nurtured in a way that he or she can no longer do either because they have something else now they want to do in their lives - that’s a very, very important and good signal - or simply because they believe that it is so. Those are the transitions in which the enterprise and the family have some chance of success.

I’m not sure I can offer more stories than that because these are not generic. I’m not giving them generic answers but these are the actual realities of what I’ve seen that actually has a successful transition and what doesn’t.

Noah: Yeah. Let me ask you perhaps our final question, which you alluded to throughout the stories and part of your answers. That’s that unfortunately, the quantitative money that is created by a liquidity event is often first used by owners - the wealth creators - as possibly having a negative consequence when presented to their beneficiaries and their dependents, be it the children or parents or cousins or siblings. It’s one thing that I find frequently, irrespective of the volume of financial assets that are created. I think it’s a very common problem, the perception that the money is the problem. Maybe you can comment on how to combat that fear that owners might have that now I’ll have a pool of cash and either my children will get some of the lump sum and I don’t like that. You take it from there.

James: Noah, in the world we inhabit and all of history since writing - that’s about 6,000 years ago and so certainly in pre-history before writing - there is this common universal proverb used and spoken in different ways: Shirt sleeves to shirt sleeves in three generations. The first generation has a wealth creation. The second generation changes its value system, changes where it lives, builds big houses, goes on the opera board. The third generation, with no experience of work, dissipates the fortune. The fourth generation in the Chinese idiom goes back in the rice patty.

The pattern of money in three generations universal culturally - every culture on earth, I want the listener to hear that very clearly - has this proverb in some form. The wealth creators who are worried about just having money are right. It’s an absolutely legitimate worry and it has proven throughout human history - again, 6,000 years of writing and I’m sure in prehistory - that their fears are well founded. Knowing that that is so rather than agonizing over it is a very different emotional position to be in. Would you agree?

Noah: Yes, of course.

James: So knowing that a family is at risk in the monetization of that - by the way they’re just as much at risk if they hold on to the enterprise for another two generations because exactly the same pattern happens in the family and then is reflected in the enterprise. Let’s talk about the family that’s having a financial event that’s monetizing this dream.

The great difference between being worried about it and being interested in the question is enormously important, because if one is simply worried, one doesn’t often do anything about it, just sits and worries and it comes true. If someone was interested in that question and exploring that question, then let me say first that there is great learning on the avoidance of the shirt sleeve to shirt sleeve problem. Some of that learning is in my books and some of that learning is ancient learning and wisdom about family and how families act in the world, how they grow their own selves and flourish. Then very recently, with two co-authors, I wrote a book called The Cycle of the Gift. I wrote this book not because I wanted to write another book - I didn’t - but because the three of us who have, you know, probably more than a hundred years of service if we added it up together, of working with families, realized, Noah, that every family we had worked with, every sort of conference we’d gone to where the families were present, most of our colleagues would say the same thing.

When you get into the really good conversations with your clients, they ask you with great humility, "How do I avoid having trust funder children, how do I avoid having dependent children and grandchildren?" The problem of the professions has been that no one has been prepared to answer that question. Endless questions are asked by very well-meaning people, the ones you were describing and thinking of being absolutely right to be concerned about this question of just money and its impact on people. These clients are entitled to be engaged with that problem with not necessarily an answer because that has to do with their own unique system and the members of that system and their condition. They are, we felt, entitled to an answer that would at least create real conversations inside themselves and then with their children and their key advisers.

The Cycle of the Gift is our answer - we hope it’s our gift - to this conversation to enable the conversation so that the people who are interested in this question, not just worried about it but interested in it and intend to do something about it, have a way of engaging in a conversation that we hope will be really helpful to them, will reduce their anxiety and make them more capable of taking the actions that they and their family most need them to take in order for the money as it goes into the future hands and into future generations, are gifts rather than transfers, terms I used earlier in this conversation with you. I just want to say transfers, those are things that we do because our tax lawyers and our bankers and our accountants say we should, are always harmful.

Those things that we do as gifts by considering what the impact on the recipient will be and the recipient’s capacity to adapt to that action, the quality of the recipient’s resilience or the ability to grow that resilience so the recipient can integrate into their lives that which is in fact alien - it is something someone else created - this is the core work. This little book, and I’m happy to say to your listeners that it’s a very short book, intentionally short book, gets right at the question of what is the condition of the recipient, not what is simply the best tax and creditor protection scheme that could be - or worse, governance of some enterprise scheme - that the recipient is sort of parachuted into.

Now that’s a lot of words. It’s philosophy, but I’m hoping that the book - better than what I’ve said early - that the book better gets simply into this question but with great compassion and hope for all your listeners, Noah, getting right the question of integration into the recipients of the manifestation, now the maturation financially of a dream someone else is just fundamentally right from a humane standpoint.

Noah: Do you feel like over the passage of time and maybe specifically throughout your career, that this concept of gifts versus transfers is now coming out to its own and perhaps getting recognized by those professions that typically have advised transfers in the past?

James: Noah, it’s my profound hope that that is happening. The reason I began ten years ago to talk about transfers and gifts was that no one else was talking about it. It wasn’t that I thought it was a bright idea, "Oh, gosh. I can go out and beat on this and this will be…" No. I just got frustrated because it was so clear to me in my own individual practice with my own children, my own grandchildren, my individual practice with my clients, that it was a stark difference between transfer and gift. By the way, grantor’s remorse, again, to use the term that I used earlier in the stories you asked me, grantor’s remorse comes from making a transfer which essentially one discovers as a transfer that has done harm or is doing harm but it’s only after the fact. That’s why it’s remorse.

So I decided to start talking about this differentiation between transfer and gift. Now, let me say this is immensely challenging to the quantitative professions. This is a funny thing to say because profession is an art - it’s not a science - and as an art it is intended to be qualitative. That is, it is intended to provide service that improves the quality of lives of one’s patients, students, congregants, or clients. Profession is that, so when a profession becomes quantitative it’s no longer profession. It’s a science. The problem is, it’s science, as such, measuring things is not interested in the art of human growth and human flourishing. It’s interested rather in measuring outcomes.

This is fine but the problem when profession fails to be engaged in service and in the flourishing of the persons who are being served rather than in the sale of products, which can be measured, then the system fails, because then what the client is seeking in profession he can’t find. Even if he thinks he found it what he gets is a default to quantitative products. That’s a default for him because he was wise enough to go seek to find service and then he must again be wise enough to say, "But you’re not providing me with the service that helps my family flourish. You’re providing me with quantitative products that might solve a set of problems but I don’t know that they will solve the problem of my children and grandchildren falling to just money, falling to becoming dependent people." It’s a great problem that exists.

I started talking about transfers and gifts with the intention of trying to do two things - one, to give a vocabulary to the clients that they could use in their conversations within their families, within themselves interiorly and then with their advisers, and to give the advisers a clear scientific division - measurable division - between the sale or products that are transfers and will lead to remorse or lead to just money, the term you used - the greatest desire that the clients don’t want, the conditions the clients, but that’s where it leads, or ask them to condition their advice on the qualitative question of what is the impact on the recipients. What is there capacity to adapt to what will be alien events in their lives? Can they deconstruct these events and then reconstruct them so that they can make them work?

I was trying, Noah, and I don’t know how much success I have. Hopefully the book, which is making the same points because it can maybe reach more people, will help. I’m trying really, really trying to help give an answer to the really well meaning, thoughtful clients who are asking themselves the "just money" question because they’re right. You can hear the passion in my voice, I hope.

Noah: Well, it’s something we’re both passionate about. I guess I will follow up with one last question, which is, is it your belief that we can change the statistics through better education?

James: Absolutely, but we can only do it one by one by one. You know that wonderful image of the little boy on the beach surrounded by starfish that had been thrown up by the sea in some extraordinary wave event and they are beached. A man comes along walking a dog in the other direction. He sees this boy lifting up a starfish and throwing it back in the sea surrounded by, let’s say, 10,000 starfish. He says to the little boy very imperiously, "Well, that isn’t going to help. Look how many starfish there are." The boy lifts up the next one and he says, "It’s going to help this one," and he throws it back into the ocean.

I’m a starfish man. I’m not a scale man. Profession is not about scale. Profession is client by client by client, right?

Noah: Yeah.

James: I’m a starfish man so if I can help one person by one person by one person who well-meaning and with intention and love for his children and grandchildren or love for her children and grandchildren, wants to avoid the just money problem that leads to the shirt sleeves proverb and leads to terrible human suffering, I want to try to help, but I think we have to help one by one by one. I don’t think there’s any scale to this, frankly and sadly, because many sellers of enterprises are disinterested entirely in just about everything we’ve discussed today because they really want to have the monetization event, they really want to have the money, and they really don’t care much about a lot of what we’ve been talking about.

I’m sad to say that. I’m not disturbed by it. I think it’s perfectly fine because every human being I meet, Noah, I meet exactly where he or she is. I don’t judge anyone and I have no interest in them being other than who they are, but I think I couldn’t finish the call without saying that it is not everyone who understands these questions in the interior sense of understanding that causes that person to say, "I seek to find answers." I just don’t think we can say that’s given to everybody, can we?

Noah: No, but hopefully by putting our content here on the internet, which has been such a wonderful invention, those seekers of wisdom hopefully have found us here and can get some education and maybe some answers from us or at least an appropriate way to start asking questions to themselves and their advisers. Certainly, your information and knowledge has been real helpful. I think it will lead them down for more fruitful, rewarding and happy path.

James: Well, Noah, blessings on your work and your partner’s work, and to anyone who is listening, blessings on you in seeking to listen and seeking to find a way that your children and grandchildren will achieve happiness rather than unnecessary suffering. Namaste.

Noah: Namaste. Jay, for those listeners that want more information, maybe can you describe the contents of your three books and why someone might choose to read one over the other?

James: The first book Family Wealth is written to your listeners, to the lay audience and intentionally written to try to open conversation, to open up the nature of a family, the purpose of a family, which I believe is to enhance the journey of happiness of each member.

The second book Family is a book written really more to a professional audience that provides a way to utilize ten different academic disciplines - that’s how complicated this field is - that bear on a family’s well-being and happiness. It has a very large bibliography associated with it, with each chapter and I wrote it in the hope that it would provide to professionals and family members who wish to go really deep in the subject. Not my wisdom - I have none. I am simply a redactor of others on whose shoulders I stand - but to provide them hopefully with a path that would provide them to go very deep if they chose to through one of those disciplines in which they are particularly comfortable.

The third book, which I have mentioned, is a book designed to create a conversation between transfer and gift. I might add, Noah, that on my website, which is www.jamesehughes.com, that there are a series of reflections. These are short pieces and a couple of quite long pieces on subjects where three or more families ask me the same question more or less at the same time and I decided I needed to write out something that would help them in the dialogue they wanted to have about that question. What’s also on the website, the quite long pieces, are the unredacted chapters that came into the book Family, which of course had to be edited down in order to be appropriate for publication, but I decided that some of the chapters are, again, for the audiences interested in the deeper experience. They should have the whole chapter of what I wrote and the bibliography.

I offer those as available in the best sense that I hope they will help. There was no other purpose to write them other than to hope that someone I would never meet would read them and find them useful.

Noah: Great. That’s one of the reasons I do these podcasts and I’m so appreciative that you’ve been willing to devote your time today to give our listeners a glimpse at some of the wisdom that you shared over the years with your books so I greatly appreciate it. James E. Hughes, Jr., the philosopher of the family, a great author. If those of you that are listening are interested, if you visit www.Divestopedia.com you’ll see links to the books on Amazon or where they could be purchased, and also a link to Jay’s website. Thanks so much, Jay.

James: Namaste and thank you. It’s been a privilege.