The Cycle of the Gift Family Wealth and Wisdom Bloomberg Series, Vol. 168

A comprehensive guide to giving well to family members Giving is at the core of family life––and with current law allowing up to $5,120,000 in tax–free gifts, at least through December 2012, the ultra–affluent are faced with the task of giving at perhaps largest scale in history. Beyond the tax saving and wealth management implications, giving to family members opens up a slew of thorny questions, the biggest of which is, "How do I prepare recipients of such large gifts?" With that question and others in mind, Hughes, Massenzio, and Whitaker have written The Cycle of the Gift in three main parts: "The Who of Giving," "The How of Giving," and "The What and Why of Giving." The first part focuses on the people most deeply involved in family giving, especially the recipients and givers (parents, grandparents, spouses, trustees). The second part, "The How of Giving," addresses the delicate balance of givers who want to maintain some level of control and recipients who want some level of freedom in accepting and growing their gifts. The final part, "The What and Why of Giving" describes various types of gifts, from money to business interests to values and rituals. The authors also introduce their "family bank" concept as a model that combines loans, trusts, and outright gifts. It embodies a framework and set of practices for long–term family growth. Even families without great wealth––or those who have already made large gifts to their children and grandchilren––can benefit from the human wisdom and practical advice found in The Cycle of the Gift .

Preface xv Acknowledgments xix Introduction xxv Chapter 1 The Elephant in the Room 1 Grandparents&rsquo, 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&rsquo, 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.