Who are the business professionals you rely on to make your life better?
Most financially savvy families have an attorney to prepare an estate plan, a CPA to prepare annual tax returns and a financial advisor to manage and grow their investments. Smart families also have a mentor, friend, or senior family member to provide sound advice when needed. Really smart families, known as Legacy Families, bring all their professional advisors and mentors together to create a Board of Directors (BOD) to form a family brain trust. The advisors work as a team to ensure the family’s long term success by building multi-generational relationships of trust with the entire family, and each other.
Creating a BOD isn’t a onetime event that happens overnight.
It’s a journey, a series of next right steps to your future. The path isn’t always straight, and it’s likely you will encounter peaks and valleys along the way. Like any other process, you get out of it what you put into it.
My journey to create a BOD began shortly after my oldest daughter Tiffany joined our real estate investment company. She is the third generation to manage the company, which has allowed me the freedom to pursue my passion for the Legacy Family Revolution.
We manage a dozen different entities who co-own commercial real estate. It’s not difficult, but it is quite complicated. Tax season is always hectic. My parents, two of my brothers, and I used the same CPA for over 20 years. With my business and accounting experience, I made his job easy, which is good because he is a solo-practitioner with part-time help.
When Tiffany came on board, I realized it was time to upgrade our process and requested his help to add structure to our systems. Unfortunately, he was unwilling to change and ignored my requests. When I considered a future without me in it, I saw my family floundering. Despite our years together, I realized it was time to find a new CPA, one that would care for my family after I was gone.
Call someone you trust and ask for a referral.
After the tax season ended, I contacted my estate attorney for a CPA referral. He provided us with three names from different sized firms. Tiffany conducted initial phone interviews. Each CPA wanted to see two years of tax returns for each entity before we could meet in person. Yikes, it was a lot of extra work!
After waiting several weeks for them to review the files, Tiffany booked back to back interviews on the one day she had childcare for her two-year-old daughter. We brought her infant with us which means we had three generations conducting the interviews. I’m sure we were quite the sight.
At the end of the day, Tiffany wrote the name of her preferred CPA on a card, and I did the same. We turned them over at the same time and discovered we had picked the same person. That was easy!
The hard part for me, was telling my existing CPA goodbye. After twenty years, business relationships can feel like personal relationships. Until they end. Rather than tell him over the phone, I invited him to lunch and was caught off guard by his display of emotion when he heard I was moving my account. It wasn’t an easy thing to do, but it was the right thing to do.
The change was worth the effort.
It’s been two years since we switched CPA firms. The new firm is larger and keeps us up to date on tax changes that affect our business. It is a service we hadn’t received before, and one I appreciate. We don’t go into the office because they have a secure portal. They provided the guidance we needed to upgrade our systems. Best of all, Tiffany is their point of contact. Each tax season she is learning a little bit more.
The CPA we choose just happens to be in the same office building as our estate attorney. They have many shared clients and play golf together on Fridays. In other words, my family benefits from their team environment.
When you choose advisors who work together as a team, you make it easier for them to help you.
For example, last year we sold a few pieces of commercial real estate and were faced with a big tax liability. We had questions about various options and wanted to hear from our CPA and our attorney. Because they are in the same building, and have a great working relationship, we held a quick joint meeting to discuss alternative solutions. Quick is the key word here. When you have multiple professionals in the same room, it’s your job to keep the meetings concise and focused. We received the advice we needed and left the meeting with confidence. It was easy for us and easy for them.
Our BOD also includes our banker. After my parents passed away, I borrowed several million dollars to purchase commercial real estate so that we could settle the estate. It was right before the 2008 crash. Ouch! I am happy to report that we have whittled the debt down. But our banker is important to our success, so we have included her on our board.
Who will be on your board?
Do your current advisors work well together? Are they open to change? Who has the knowledge, desire and skills to help your family? Creating your board of directors takes time. Now would be a good time to start. If you need help creating your BOD, send us an email at firstname.lastname@example.org with “Need help with our BOD” in the subject line.
Cindy Arledge, MBA is a best-selling author, visionary leader of the Legacy Family Revolution and Legacy Advisor to business owners and financially savvy families who want to protect their family’s future. Using her signature system, families identify their core values, mission and vision. They learn how to work together in a cohesive manner, and discuss difficult topics without the drama. Cindy’s passion to help families was born out of the pain she experienced after her parents passed away eight months apart. www.LegacyFamilyRevolution.com.