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The Cycle of the Gift

 

“The Cycle of the Gift” by James E. Hughes Jr., Susan E. Massenzio and Keith Whitaker, published by Wiley & sons.

Introduction to the Hebrew edition

In Israel, wealth is relatively new. I assume that most readers of this book were raised on the expression, “If I were a rich man”, said in empathy for Shalom Aleichem’s Tevye the Dairyman, a poor man.

From the perspective of those who suffered from a lack of means, wealth could be perceived from only one angle – as desirable and cosseting. The dilemmas of wealth management, owner’s liability and next-generation succession stayed outside the picture. However, in the past few years abundance and wealth have become part of the reality of more and more families. They create an opportunity for parents to give to their children, and at the same time, they create unfamiliar new dilemmas and challenges.

I learned about the strong need of parents to give to their children from my late mother. After I left the kibbutz, every week she would walk the (considerable) distance to the bus station lugging a basket laden with vegetables, to load the basket onto the bus on which I traveled from Tel Aviv to my new place of residence. As a kibbutz member, it was the only thing she was able to do, while her need to give was uncontrollable. The parents we accompany at UBS want to give their children the fruits of their labor and success so that they will be financially secure and settled, so that they will be “happy”. In other words, so that they will not experience the hardships experienced by their parents as they forged their path to plenty. On the other hand, they are aware of the possibility of spoiling the children that sometimes accompanies wealth, and fear it.

There is hardly a family I meet that does not wrestle with the issue of giving to the next generation. What should we give? How much? Why? When? How? What tax considerations need to be factored in? How do we talk to the kids about giving? And what do we leave to our grandchildren? While on the subject of grandchildren, very few members of our generation had a grandmother and grandfather. As for those who did, in most cases their grandparents were unable to give much besides love and stories. So we lack a model of how to be grandparents who give gifts of money and assets. And in turn, the young parents lack a model of how to talk to their parents about what they are giving to the grandchildren. Thus, so many people filled with love and good-will face an issue which they have no tools or language to tackle.

Families find it hard to share these troubling thoughts with others, because “we have wonderful children”, and anyway, these are “first world problems”. There is no course available where you can learn about the subject. Until recently, there weren’t even professionals who could be consulted. And now a book has reached us, which is entirely devoted to giving within the family. I loved it from the first page. I loved it because it talked about “giving”, and not about what learned men of law call “wealth transfer”.

“Transfer” is a financial transaction, rational, cold. “Giving” is emotional and personal. Every one of us has had the experience of a gift that was especially successful, the best gift we ever gave anyone. That feeling of gratification because we understood what the recipient needed or wanted and were able to make their wish come true in exactly the right way and at exactly the right time, no matter how small and momentary. What made the gift such a hit was the fact that the giver succeeded in reading the recipient’s mind and heart, captured his wish and wanted to make it come true. There is a moment of grace here, benevolence. There is the giver’s intention and his understanding of the recipient. And this embodies a truly enriching experience for both parties. Hughes and his colleagues believe that in exactly the same way, the transfer of wealth and assets by parents to the next generation can be “giving” in the full sense of the experience. Giving that has a soul. Giving that brings happiness to and grows giver and recipient alike. And no less important, giving that teaches the recipients to be good givers when the time comes.

As I continued to read, I was excited to discover that the book clearly formulates things I tell the families I accompany, as well as many more things that I would tell them if I only knew how to put them into words as accurately as Jay Hughes and his colleagues. I found myself nodding in agreement page after page, moved and excited, as if my old friend and colleague Jay had written a book especially for me.

The book begins with a description of the effect of “transferring”, or giving in the wrong way, on parents, their children, and on the relationship between them. It unfolds the idea of giving that has a soul and defines the conditions for giving that makes one grow from the aspect of both giver and recipient. The chapter that discusses the effects of giving on the children’s spouses is especially interesting, as is the chapter on the roles of the adult parents in the family system. The authors then proceed to a practical discussion on the question of “how”: finding the balance between control and freedom, choosing between parity and fairness, shared or individual giving to each of the children, grants, loans and trusts. And in the end, the question of “what”: a gift of money, property, shares, values, family heritage and reputation. Each chapter ends with several questions that the authors recommend that the reader ask himself on his journey to the kind of giving that grows the recipients and enriches their lives, and not merely their bank accounts.

In closing, UBS Israel’s initiative to establish a wealth management consultancy for families in Israel according to the standards of the international parent company, accessible and in Hebrew, gave me the opportunity to share the experience of this book with our customer public in Israel. I believe that through the Hebrew edition of the book we will be able to develop an innovative and special dialogue with our clients. A dialogue that looks out for their assets while strongly keeping the family and relationships, past and present, in mind. A dialogue designed to grow and enrich people in every sense.

I recommend the book to all those who have a family, a business and assets and I hope that you enjoy it as much as I did.