Excerpt: Becoming a Wealth Transfer Specialist

By Karl Bareither, CLU

The Shoemaker's Children

One feature of my work that had always mystified me was the fact that, while the solutions I proposed to my business clients were virtually always technically correct, they didn't always solve the problem. Sometimes my ideas worked and sometimes they didn't. The fault didn't seem to lie in the solutions themselves - there was something else happening. Something not clear to me until a crisis occurred in my own family.

In 1986 my only daughter Karla, died. Not by accident or sickness, but by her own hand. My wife, Lillian, and I were devastated. I had no idea Karla was experiencing major depression. I was too busy to see. In classic workaholic fashion, while I was busy helping other families with their needs, I had neglected many of the needs of my own family. The shoemaker's family had been going barefoot.

In hindsight, there were signs. One day, not long before she died at age 24, Karla approached me and asked if I would agree to seek outside help and attempt to bring our family of five closer together. Karla knew something I didn't know. While we were obviously prosperous, something was missing. The relationship between Karla, her two brothers, her mother and me was not as close as it should have been. Communication was not as open as it could have been. Karla desperately wanted us to be a closer family; one where each was willing to listen to the others' needs; one where the father had time - quality time - to spend with the family. But while Karla was pleading for me to take time to smell the flowers, the workaholic in me was admonishing her to plant flowers.

To placate Karla, Lillian and I agreed to seek outside help if she could convince her two brothers to participate. We knew Karla would not be successful in convincing her brothers. Frank communication in an open, family gathering environment was simply not our style. I didn't believe it was going to happen - and it didn't.

Eventually, Karla gave up trying to convene the family meeting, and then one day she just gave up everything.

No amount of time, no words, no degree of counseling can ever completely erase the pain of losing our daughter. There is simply no way to rationalize away the fact that Karla found life unbearable - unlivable. Our family relationship may not have been entirely at fault, but I can't help but think that I should have been able to do something to prevent her death. Perhaps if the lines of communication had been more open between us, she could have let me know of her pain, and I could have intervened. The unanswered questions and feelings of guilt experienced after a loved one commits suicide are the heaviest burdens you can imagine.

If any good can come from such an awful experience, I like to think it's that I learned something from Karla. I learned the value of family love. The importance of open communication among family members. The value of taking time to smell the flowers after working to plant them. The bitter cost of yielding to the temptation to measure one's worth only in terms of work and accomplishments. Our family can never heal our relationship with Karla, it's too late for that. But the four of us can honor her by working to improve our relationship with each other and by extending the lessons we've learned to other parts of our lives.

Finding Peace of Mind

Given my propensity to overwork, it would have been easy for me to deal with my grief by burying myself even deeper in my work. But that would have required my ignoring Karla's wishes yet again. Instead, I chose to alter my work habits and search for balance between work and family and, at the same time, bring the lessons I learned about the importance of family relationships into my work.

I began to see my work with family businesses in a new way. I began to realize that it wasn't only about technical solutions after all. It wasn't about finding the most tax-favored way to pass the family business or the most effective estate planning technique - it was about the family itself! I emerged from my grief with a mission: to find a way to literally put family ahead of business in family businesses.

Some years later, I decided to survey my existing clients and verified what I had begun to suspect. In many family-owned businesses, a serious breakdown in family communication hindered both quality family relationships and business profitability.

It was during this time that a family asked me to interview all their family members in order to help them prepare a new plan that would meet the needs of all family members. One of the children lived a long distance from the rest of the family and was not actively involved in the business. The family felt it was important to plan for the future of the business while the matriarch was still living and in good health.

Eventually, the planning process resulted in a plan whereby the inactive child was to receive non-business assets instead of a minority interest in the family business. Everyone in the family was satisfied with the results of the planning process. Active family members would own the business and the inactive family member would receive non-business assets.

Armed with this success, I committed myself to finding a new way to work with family businesses. Instead of working solely with the business owner, I would work with the entire family. Instead of agreeing to develop a business plan in secret, I would encourage openness on the part of the owner and all the family members. Instead of focusing only on the technical aspects of the planning solution, I would search for ways to renew the quality of life for both the business owner and the family members.

What I learned over the years, applying these new principles to my work with families and their businesses gradually came together into a cohesive process with a beginning, a middle and an end. A process that ultimately leads to a plan for the business that meets the needs of all family members - not just the entrepreneur. A process that also met my own need to apply the lessons Karla taught me and spread the word that having a successful business and a successful family life are not mutually exclusive goals. With this book, I hope to be able to spread this message!

A New Way of Working with Family Businesses

Over time, this work has led me to develop a process called Family & Business Renewal. I like to think that my personal evolution was from advisor to specialist. From a technician - using my mind to match problems and solutions - to an artist, if you will, working from the heart to conceive, design and build something new. Over time, the Family & Business Renewal process developed into a truly unique way of doing business. More like building a monument to a family or entrepreneur than like simply developing solutions and selling products. I began to see myself not as a sales person or advisor, but a wealth transfer "architect." The more I thought about it, the better I liked the concept. Karl Bareither, Wealth Transfer Specialist.

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