Early modern society had very few roles carved out for women. A girl typically moved from being a daughter to a wife and then a mother. While these three roles were different from one another and came with different responsibilities, they were all subject to men’s authorities in some way. This trajectory affected the involvement and participation of women in wealthy families as a woman’s role became passive and silent and when it comes to financial matters in wealthy families, not much has changed.
This may be a safe structure as long as the wealth creator can guarantee an unlimited life. However, because life is limited for everyone, couples must talk about death and how to prepare their dependent spouse for the leadership and management role they will take on when the wealth creator dies. Although it is not in all cases that the male wealth creator dies before the wife, research has shown that most women will live longer than their husbands and it is this situation that creates a need for the preparation of the spouse so that wealth can be preserved beyond the wealth creator.
The women in and of themselves are not risks to wealth; it is the fact that they are unprepared, passive, left behind, and uninvolved, that creates this risk. The days after a woman loses her spouse are often a blur. After the immediate shock, she has funeral plans and wellwishers to deal with. But when the haze of activity subsides, many of these widows then become overwhelmed and faced with the harsh reality of independence, leadership, management, control, and power that is bestowed on them. While the independence, control, and power that women gain in widowhood have its benefits, it can also come with many obstacles to wealth preservation. If the window is already aligned and prepared for
her new role and if the husband has confidence in his wife’s ability to manage his estate, then the results are supportive of wealth preservation. If the widow, on the other hand, is unprepared for her role, have values and agenda that are misaligned with that of the wealth creator, the wealth can be put at risk.
The widow holds great influence and power and whether she is allowed to be actively involved and participate in the family business or not, her influence is felt and can disrupt the preservation of wealth. There are two major risks to wealth from a passive and uninvolved spouse.
The Diversion Risk and The Influence Risk
The diversion risk which is the risk that most legal expert focuses on is the least risk posed by an uninvolved, unprepared and passive spouse because this risk can be easily taken care of by appropriate provisions in the trust or estate plan. Additionally, women are less likely to remarry after the death of their husband and so the diversion of wealth risk is lesser with women than with most men. In fact, the diversion risk is higher with a surviving male spouse than it is with a widow.
The factor that bears the highest risk to wealth preservation is the influence factor. Most women carry a large amount of influence especially over their children who are also most likely going to be the successors. Women are one of the greatest pillars of emotional and spiritual support for their children. This, therefore, means that there is never going to be a time when the children, who are also the future successors, are away from the influence of their mothers. If this influence is coming from a woman that is naive and lack competence in financial and business affairs, these influences can become detrimental to wealth. Secondly, the majority of the trust provisions and estate plans put a surviving spouse at the helm of decision making, leadership, and management affairs. If the windows are not prepared for their role, they can make certain uninformed decisions that can hurt the family’s wealth.
The solution, therefore, is not to put women at the background or make them business or financial gurus but to get them involved and knowledgeable about the fundamentals that govern the family’s wealth and what should guide them in their decisionmaking process?
To think that you can put your spouse at the background and still preserve wealth is to be naïve concerning the influence that women wild especially when they enter autonomous leadership positions.
The key is to know where your wife stands regarding the future of the family’s wealth, make her feel heard and understood and integrate some of her own concerns regarding the family in the wealth preservation plans. There are many cases where surviving spouses have fired the wealth creator’s advisors and hired her own team when the wealth creator dies. There are also some few other cases where a wealth creator and an only child died at the same time leaving the bulk of wealth to the surviving spouse. Regardless of the the manner by which a widow comes into leadership and power, it is important that her goals and values are aligned with that of the wealth creator so that when the widow takes over, she simply continues from where the wealth creator stops as opposed to creating an entirely new agenda and disrupting the wealth preservation process. Preparing your spouse for the task ahead will also ensure that she gives sound advice to the successors when they depend on her for guidance.
If you want to begin this important preparation process for your spouse and if you want to unify and align the values and goals of the members of your family in such a way that will ensure the continued preservation of wealth beyond your lifetime, there is a solution for you.
This solution is what we call “The Diagnostic Family Meeting”. The goal of this meeting is to first diagnose and understand the level of preparedness of the individual members of your family as regards the long-term preservation of wealth and to create alignment in the goals, vision, and values of the individual family members so that your family can jointly propel wealth into the future. To find out more about our “The Diagnostic Family Meeting” send a text with the Title “Diagnostic Meeting”. to 08101860042.
Behind the scenes of thousands of family wealth that have been destroyed in history, are women. Although there is a limited amount of research carried out on their role in the loss or preservation of wealth, we know that the competence, capabilities, and preparation (or lack of it) of those women played a great role in whether wealth was lost or preserved. The more informed, involved aligned and prepared your spouse is, the greater your chances of preserving wealth long-term.
The future of wealth depends on the preparedness of your spouse and children.
Grace Agada is a Senior Wealth Advisor and Author with extensive experience in wealth creation, wealth preservation and wealth transfer.
info@createsolidwealth.com 08101860042
