In this session, you will learn about:
- How owners can make sure their legacy is long-lasting and positive;
- The most important thing a family can do to maintain harmony;
- What you should know about ethical wills and how they influence families and help maintain family harmony after the death of a matriarch or patriarch;
- How defining and sharing family values helps ease concerns when it comes to leaving an inheritance; and
- How and why you should create a culinary memoir.
About the GuestJudith Kolva is the founder and chief executive officer of Memoir Shoppe. Her doctoral work focused on how preserving life stories can create meaning in life. Dr. Kolva is a trusted interviewer, expert researcher, gifted writer and accomplished educator. Her experience, expertise and standards of excellence ensure a seamless, enjoyable, completed project. She is an active member of the Association of Personal Historians and a contributor to its transformational, "My Words Are Gonna Linger: The Art of Personal History."
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Read the Full Transcript Here:Noah Rosenfarb, CPA: Thanks so much for joining us today for the Divestopedia Exit Strategy Podcast. I've got a great guest with us, Dr. Judith Kolva, a personal historian who creates beautifully designed, heirloom quality books that preserve family stories. Thanks so much for joining us today. And let's get right to the meat and potatoes. Why don't you tell me how owners should make sure their legacy is long-lasting and positive?
Dr. Kolva: Thank you. That's a great question. Let's start by saying that we know that high net-worth families understand the importance of trusts and estate plans. And they get it. They get that the multi-generational transfer of tangible assets such as stocks, bonds, cash, real estate, art, jewelry, their collectibles, and even their exclusive memberships is very common place. And we're not going to negate the importance of those tangible assets, but there is an even greater and often unrecognized intangible asset. And that asset is the family story. That's the story that tells what the family has been, who it is today, and what it can be. We, as practitioners, are all too familiar with that "shirt sleeves to shirt sleeves in three generation syndrome." Only 10-30% of high net-worth families actually preserve their wealth beyond that third generation. We know that. And most of us are familiar with that empirical study that was conducted by Preiser and Williams, and it concludes that this phenomenon, this "shirt sleeves to shirt sleeves" is not due to taxes. It's not due to law, or restrictions, or missed market opportunities, or economic downturns, the mechanics of wealth, or even advisor skills.
Instead, it's directly attributed to a families failure to prepare its heirs to receive and accept the responsibilities of wealth. In other words, to preserve its human capital. And because the family story identifies and operationalizes the family's distinctive heritage, it contributes to that family's ability to preserve its human capital. So, to indeed prepare heirs to be financially responsible, until the children, the grandchildren, the great grandchildren, and beyond to address that shirt sleeves to shirt sleeves axiom. I'm going to refer to one of the gurus in the field, Jay Hughes, he's author of Family Wealth--Keeping it in the Family. And Jay says, "family stories are the glue that binds together individual family members." And he's worked with family members for over 50 years. And he says that every family I know that is successfully preserving its wealth sets aside time to tell its story and to share its unique history. And I want to tell you a very personal story. And I have permission to share this story. I'm going to tell you the story of Mrs. Lavern Norris-Gaynor. Mrs. Gaynor is heiress to the Texaco fortune. And we did Mrs. Gaynor's story. We created her book. And Mrs. Gaynor, at one of our very last interview times together, Mrs. Gaynor cried. And I said, "Lal, what is it? What's wrong? What's wrong?" And she said, "You know? Last night I woke up, and I had an epiphany." She said, "I almost didn't tell my story." She said, "For years, my children begged me to tell my story. And I would, oh yeah, yeah. I will, I will, I will." And she said, "But I put it off. I put it off. I put it off." And then I met you and I decided, "Okay, it's time." And she said, "Now I realize that it was my obligation to tell my story. So what I can now say is that I feel very blessed. I have a peaceful heart, because I know my family's legacy of gracious giving will indeed reach out and touch tomorrow."
Her story starts with how at 18 years old her mother inherited the family fortune, the Texaco fortune. Her story recounts how her father was responsible for Victory Gardens, and how Victory Gardens, and for those listeners who may be too young to remember Victory Gardens, Victory Gardens are how we, our country survived World War II. That people in the United States planted their Victory Gardens while the food, the canned goods, were being shipped overseas. And to think of that, that people didn't know that it was Mrs. Gaynor's father's idea, to create Victory Gardens, and how they really came to be that Mrs. Gaynor's father convinced his friend, Walt Disney, to give Mickey Mouse a green thumb. And that's how Victory Gardens became popular across the United States. So her story, Mrs. Gaynor's story, tells that story of her father. It also tells the story of how her father who is a cartoonist as well as doing other things, convinced Mussolini that he should draw, that Mrs. Gainer's father should draw Mussolini's portrait. So he talked his way into Mussolini's chamber, he drew Mussolini's portrait, and that portrait is now preserved in Mrs. Gaynor's book. She told us the story of how her parents went off to Canada, and they bought a bear cub. And it's just hysterical that what happened to the family, to her parents as they brought this bear cub back to the United States. They got it its own room in a hotel, and it got its feet stuck in the old springs of the bed. And made this horrible noise in the middle of the night, and they had to go in and rescue the bear cub. And they bring it back to Chicago, and the bear cub becomes the mascot of the Chicago Cubs. Her story talks about how her family's fortune got two towns, one Naples, Florida, and one a small town in Illinois through the great depression. The family is responsible for the Naples pier. The family preserved the wonderful heritage of a Keewaydin island around the Naples area. So when you look at all of that, it clearly goes back to how sharing stories can preserve that long and lasting legacy and make it positive. And through the preservation of that human capital that comes out through telling the family's story, ensures and protects the family from that shirt sleeves to shirt sleeves in three generations syndrome.
Noah Rosenfarb, CPA: Yeah, so when should people carve out that time to tell their story? Not just to produce the memoir, or video, or books. How often should they be telling their story? Is it around holiday time? Is it around weddings? Where should this be told?
Dr. Kolva: Yes, that's a great question. Again, all of the above. What I encourage my clients to do, even if they decide not to do the book, the beautifully-designed book, I encourage them to keep a little tape recorder, and to take that little tape recorder to the Thanksgiving gatherings, to the weddings, to the times when the families are together, and ask questions. And pass that little recorder around. Because then they do have that essence of this story. And what they decide to do with it, that can always happen. But the importance here is clearly to preserve it, to have it, to get it on tape. One thing I'll advise, another thing I advise my clients to do is I'll ask them. For example, if I'm making a presentation, "Okay, let's pretend that you had an opportunity to have one last conversation with a loved one, with a passed loved one, with a deceased loved on, what is it you would want to ask that person?" And they start to think, and they start to come up with questions. And then I'll say, "You know what? Those are exactly the things that your descendants are going to want to know about you." So use those questions. Write those questions down. And use those questions as a basis for your conversations with your elders, with the elders in your family. And the elders don't have to be elder-elder, don't have to just be the great grandparents or the grandparents, the people in your family. So there's not a poor time to start this. Even children, the children in families will have memories, memories about their grandparents, or memories about their current life. So there's never a bad time to start this. The bad time is when you put it on the someday list then don't do it.
Noah Rosenfarb, CPA: Right. And I guess so many things can end up on a list that never gets done. So how do you encourage people to go through the process of taking the time to answer the questions? Is it something that people should kind of set aside the time and do it all at once, or is it a long process?
Dr. Kolva: It can be either. When I work with a family or a business wanting to tell its story, we do that as a, I'm going to say, in a chunk of time. Where that is that's specifically set aside to tell that family's story. And I want to go back to that someday list syndrome. When people say, "Oh yes, someday, someday, someday I'm going to do this." But what happens is they don't have the skills, they don't have the resources, and they don't have the expertise to do it. So often they don't. And that's where bringing a professional in can be very, very, very, very helpful. But what I'm saying is if they don't want to hire a professional, to get it started with some of those suggestions that I made. So at least they've got that foundation of the family's story.
Noah Rosenfarb, CPA: Yeah that's great. So tell me, if families want to maintain harmony. After a transaction, a lot of times they're centering their family around a business, but when there's no more business, becomes difficult to maintain that harmony. So what would you think is the most important thing they can do to keep their family together?
Dr. Kolva: One thing that jumps out at me immediately is to understand and appreciate those generational differences, because we often have, today, four generations in a family. And let's just address the kids for a minute. Believe it or not there was life before cell phones. And by understanding what that life before cell phones was, and appreciating it, that can make such a difference in family harmony. And let me just tell you a story here. I once worked with a family, and the family told its story. We did, in this case, in this family's case, we did create this beautifully-designed book for the family. And when the younger generations read about, in this case it was their great grandparents who went through the Great Depression, who went through World War II, and when they told about, the great grandparents told about the struggles they had, the great grandfather who was now G1, and was the wealth creator, told the story about how he walked down the streets of Detroit, and he saw a sign in the window, and it said, "Ham .05 cents a pound." And he didn't have a nickel to buy a pound of ham. When they told those stories of what it was like to get through that great depression, to get through that World War I. When the now great grandson read that story he said, "You know what? I'm not going to laugh anymore at grandma when she takes her tin foil and she rolls it in a ball and she saves it." Where before he had laughed at her, he made fun of her, and he just didn't get it. But by telling that story and starting to understand those generational differences, was one way to maintain that family's harmony.
Noah Rosenfarb, CPA: That's a great story. And so true that oftentimes people forget to be sensitive to one another and where they came from, because they all do come from different places, even though they're family.
Dr. Kolva: Absolutely. And a tool that I love, that I often use with families to help them understand their differences, not only their generational differences but their personal differences, is the Myers-Briggs Type Indicator. And we go through the Myers-Briggs Type Indicator and understand it, understand why you're different than I am different. And then can directly relate to examples in the family that bring those types to the surface. And instead of having the struggles and the disharmony, to understand and to appreciate the strengths and the synergy of the family.
Noah Rosenfarb, CPA: So one of the things that I think you've written about is ethical wills, and how they can influence families to help maintain harmony after the death of a matriarch or a patriarch. Tell me a little bit about that and what you've learned, and what you recommend.
Dr. Kolva: Thank you. The ethical will, just briefly for those who aren't familiar with ethical wills, they are an age-old tradition. And what ethical wills do is they assure that the life experiences do not disappear on one's desk. And ethical wills were first documented centuries ago. The first documentation is in the Hebrew bible, and that's in Genesis 49 when Jacob called his 12 sons to his death bed and he blessed them. And he attained a promise that they would bury his body in the land of Canaan where his ancestors were buried. Well, as, obviously centuries proceeded, ethical wills became no longer passed on in the oral tradition. They became written. And in summary, an ethical will, unlike a legal will, it bequeaths the values. It bequeaths advice. Any kind of life lessons, any wishes, and how I think of an ethical will is a legacy of the heart. What they are is they're the spiritual extension of estate plans. So instead of bequeathing the possessions, they pass on the birth rights and blessings in the form of personal and spiritual values. They give a heritage of wisdom. They talk about heartfelt matters such as the lessons learned, any thoughts on love, or advice. Sometimes there's forgiveness in an ethical will, requests, or sometimes regrets, or hopes, or philanthropic beliefs, end of life requests, or even burial instructions. And they don't replace legal wills, but they are invaluable accompaniments that can take that cold legal document and give it heart, give it meaning, give it caring.
Again, I want to tell you a story that I think will help our listeners understand the power of an ethical will. I once worked with a family, and I'm going to use the name of the matriarch of the family. The matriarch of the family was now not doing well. She had tinges of dementia. And she just was tired. She was tired of living. Well, the family had Bertha in a situation, in a home that was where she was very well cared for, with round the clock caregivers, nurses, and other caregivers. But Bertha didn't want anything to do with that. She was ready to check out. So as we were telling the family's story, as I was talking to the family, telling their story, I knew about Bertha, but I wasn't going to be able to talk to her because the family said, "Oh she doesn't care. She doesn't want to talk anymore." And they kind of just squirreled her away. And I said, "Well, would it be okay with you if I just went in and sat with her and just see if I can get her to talk?" So I went in a few days and sat next to Bertha, and held her hand. And she didn't want to get out of bed. She didn't want her hair combed. She didn't want to take a shower or a bath. She didn't want to eat. She didn't want her fingernails cleaned. She was done. She wanted to be in that bed. So we sat together for a couple of days and just kind of held her hand, and just talked with her a little bit. And sometimes she'd say a few things, but mostly she didn't.
Then one day I went in and Bertha said, "I've got to tell you something." And this happened to be an African American family, and this will give some context to what I'm going to say. Bertha said, "You know Judith, when I was a young girl I had to pick cotton to take care of my children. I had four children. And the way that I provided for them was to pick cotton." And she said, "One day I was in the fields, I was picking cotton, and a big storm came up. I had three of my children sitting under a tree, and there was lightning, and there was thunder. And I said to them, 'Children, you've got to go home. You've got to leave this field.'" She said, but I knew I had to get down to that end of that row of cotton. So I put my baby on my cotton sack and I pulled my baby down to the end of that row. When I got to the end of the row I fell and I hurt my back, but I knew I had to get back to my other children." She said, "So I crawled. I crawled. I drug my baby, and I drug my cotton back and got back to my other children." That was the story she told me.
The next day I went in to see Bertha, she was sitting up in her bed, not in her bed, she was in a chair. And she had a breakfast tray in front of her. She had her hair combed. She had this pretty little nighty with a bed jacket on. She was eating her breakfast. She looked at me and she gave me a high five, and she said, "I'm some kind of woman, ain't I?" So we knew we didn't have many days. Hospice was there, and we knew that we really didn't have many days to get Bertha to tell her whole story. But what we did was we did get her ethical will. And part of that ethical will was her burial instructions. That became very important to her. She somehow knew that the family had been arguing about her funeral service and about her burial. So what she told me was she said in doing this ethical will, "I don't want an open casket." She said, "Here's what I want." Bertha had a dog who'd been with her for years and years, and she loved that dog. And the dog was old. She said, "I want my dog euthanized, and then I want our two bodies cremated together, and I want our ashes spread on the path in the woods where we took our regular walks." And she said, "And you know what else I want? I want purple balloons released." And she gave instructions as to a poem she wanted read. She said, "Nothing else. That's all I want." Well, after Bertha passed, the family ended up complying with her instructions. They stopped arguing. They stopped disagreeing, and they did exactly what Bertha wanted. And later the daughter called me and she said, "I can't thank you enough for preserving that story, that ethical will, from my mom." Because talk about improving family harmony, that was the key.
Noah Rosenfarb, CPA: That's a great story. I'm glad you could share it. And I think the takeaway there is that oftentimes people do the same thing, and they put someone that maybe isn't 100% well, and they keep them kind of shuffled away, and they start thinking for them. And it sounds like through deep caring you were able to communicate that and pull this person out from hiding and get them to share. And that's such a great thing.
Dr. Kolva: Well thank you, and I agree with you. And ethical wills, as we've talked about, aren't just burial instructions. They are life, they can be life lessons, or they can be, "Here are my hopes for the future. Here are my hopes for philanthropic ventures that my family will continue." Or sometimes they're all about forgiveness, either a self-forgiveness or forgiving someone else thereabout. The hard lessons that I learned in my life, so they're shorter than a full story, a full memoir, but they're, again, the best way to say it, the lessons of the heart.
Noah Rosenfarb, CPA: Yeah. Well, a lot of the families that I speak with, they are concerned about some of those tangible things, especially the money, the monetary wealth, and leaving behind large inheritances. And they're worried that that can do more harm than good. So how would you say that sharing and defining those family values can help alleviate those concerns?
Dr. Kolva: Again, you're asking great questions. This is a very interesting question. And I'm confident that you and perhaps our listeners are familiar with the Alliance American Legacy Study? And what the Cliffs Notes version of this study is that it's projected that in the next 50 years, between 25 and 136 trillion dollars are going to be transferred between generations. And the most common figure number that's sited there is 41 trillion dollars. Well what the folks at the Alliance American Legacy decided they wanted to do was they wanted to quantify the hopes, and the fears, and the motivations for passing on, this "needless to say" substantial amount of money. So they studied 3,000 families.
On a Likert scale from not important to very important, 39% of the veteran generation, or of the great generation, believed that it was the financial inheritance that was very important. Well, the heirs didn't so much agree with that. Only 10% of their heirs believed that passing on the financial inheritance was the most important thing. Instead, the heirs, 77% of the heirs believed that passing on the family values, the family life lessons, and the family stories was what was most important. And as an example of that, one of the families with whom I worked, one of the women in this family said to me, "You know, learning about my mother, and my grandmother, and their values really helps me learn about myself. It gives me the sense that I am connected." She said, "I used to think that I was kind of weird because I had such values of an entrepreneur, and that didn't come out so much in the rest of my family. And they thought I was kind of strange, particularly because I was a woman." She said, "But when I realized that my grandmother, during the 1800s was a mule train driver, which wasn't a real common quest for a woman, wasn't a real common profession for a woman needless to say in the 1800s in the south." And she said, "And then I realized in the 1900s my mother divorced her husband because she found him in a rather, shall we say compromising position with one of the maids." And she said, "My mother wasn't going to put up with that. So in the 1900s when divorce was social suicide, my mother divorced him and she took her three children, and now what was she going to do? So she found a position in an orphanage where she was the caregiver in this orphanage." And she said, "So when I look back at that, I look back at my grandmother, and I look back at my mother, that really helps me understand who I am, and how the values of my family are so important. And how they can alleviate some of these concerns of the money and why this is so important." So it's preparing heirs to accept the responsibilities of wealth.
Noah Rosenfarb, CPA: And do you have suggestions aside from sharing the stories that you recommend to families?
Dr. Kolva: Often in family meetings, if I go into a family meeting what we'll do is we'll pose questions, values-related questions. And pretty much just go around the table and talk about these questions. And the questions, again, are values-related questions. Just such a basic question as what's really important to you? If you could do anything in your life, and we might do a let's pretend game, if you could do anything what would you do? And I once worked with a family, and the grandson, g3 grandson, people in the family thought he was just a little bit weird. Well, in this little what would you do if you could do anything in the world, he brought up, "You know what I would do? I would go to motorcycle school." Well, that wasn't so cool in this family with this big, fancy family business. What do you mean? They thought, go to a motorcycle school? Well this kid was really astute, and he said, "You know what? I'm going to go back to when grandpa started the business. And grandpa started working with an idea that was absolutely weird, was absolutely way far out." He started working with the auto industry. And he was practically a genius, grandpa. And he developed this little sensor for cars that lived in the bowels or the engine, way deep in the engine of cars, and it was like you know when your oil light comes on? It was the little sensor that tells the oil light to come on. Well, back when grandpa started this it was just a weird, weird idea. Well, grandpa ended up doing really well, ended up selling the family business for 400 million dollars. Well, when the grandson brought this out to the family that grandpa was weird, now you think I'm weird, it really brought home to the family well, you know what? Maybe motorcycle school isn't so weird after all. That maybe for this teenager to go off to motorcycle school is something that we should support. So just in talking through some of those issues and relating it to the connections in the family can be very, very helpful.
Noah Rosenfarb, CPA: So one of the other things I thought was unique about your practice is that you encourage families to create a culinary memoir? I wanted to know how you got started with that and what your experience has been.
Dr. Kolva: Well, we all know that food is about so much more than eating. That food is about the traditions, it's about the stories, it's about grandma's ham, or grandma's turkey, or if we're talking about Thanksgiving particulars, it's stuffing or is it dressing? And what was the way that grandma or mother made that? Or just some family favorites, there are stories that are connected to eating.
I once had a family who approached me. The matriarch of the family had passed. She was known in the family as the person who had great gardens. She was known as the person in the family who baked. She was known as the person in the family at Christmas time who would make cookies, dozens of different kinds of cookies, and give them away, give them away to neighbors, give them away to family members, take them to friends. That was how she was known. The family wanted to honor her. And we talked about well how can we do this? So what we did was we took her recipes that were still in her handwriting, they still had all of the goobers, they had all of the spills, and we gathered recipes that the family most remembered, and then we took the recipes to create this culinary memoir.
We scanned the recipes, still with all these goobers and spills. Then we had the people, friends and family members tell stories that they remembered about these recipes. And then we collected pictures that went with these particular recipes. And that was the first culinary memoir that I did. So it was a tribute to the woman who had passed. And it was this marvelous memory of her that couldn't have been preserved in any other way. And I can remember when her best friend received this culinary memoir, and she called me in tears and said, "I have never received such a beautiful gift in my entire life." So that's how it all got started. And families love. They love preserving their traditions through the idea of food, and the stories that relate to the family traditions of eating.
Noah Rosenfarb, CPA: Yeah that's great. I thought it was unique, but I think it would resonate with so many families, because food's a great part of the celebration. It's a great part of when families are gathered and everyone has their family favorites.
Dr. Kolva: Well let's face it, okay it's somebody's graduation, the person that we ask, what will you have? What are we going to serve to eat at somebody's birthday? What are we going to have to eat? So absolutely that's what our lives are about, food.
Noah Rosenfarb, CPA: So what else would you like to share with the listeners? Most of them are contemplating or going through an exit in their business. They've got a wide range of concerns, but especially as it relates to your expertise as a personal historian. What are some of the things that you can impart to them that they should be capturing at this time?
Dr. Kolva: Well, I'd like to return to that someday list syndrome. Please, please do not put this on the someday list. It's the most valuable gift you can give to your family, is that gift of your story, that gift of your memories, because you're giving the gift of your heart. Let's face it, if we plunk down our 300,000 for a Bentley, we drive that baby off the lot, and it depreciates immediately 20%, every year, depreciates 20%, 20%, but that gift of the family story is a gift that's going to appreciate over the years. So please, please don't put it off.
Noah Rosenfarb, CPA: Great advice. Anything else maybe you can share with our listeners, how they might want to get in touch with you if they have some questions or wanted to find out more about your service?
Dr. Kolva: Thank you, thank you for asking. You can email me. [email protected]. Or certainly give me a call, (954) 759-4531. If they want to poke around my website it's www.MemoirShoppe.com, and I would be more than happy to answer questions, one on one, to make recommendations as to what they could further do to avoid that someday list syndrome.
Noah Rosenfarb, CPA: Great, well thanks so much for sharing, and your contact information is on our website as well at www.Divestopedia.com. Dr. Judith Kolva, thanks for joining us today, and thanks for listening.