In my role as a family coach for wealthy families, one of the common issues that arises is the parents’ desire to be “fair” with their children and grandchildren. (I put “fair” in quotation marks because it really is an unusual term that is defined differently by many people and is almost totally based on perception.)

For whatever reason, and I really don’t know exactly where it comes from, fairness is an extremely important issue in our culture that drives many decisions within families. Take, for instance, this past week’s events over Christmas — parents (regardless of their financial status) are quite concerned about giving the equivalent financial value (or perceived value) in gifts to their family members.

There are many challenges related to parents or grandparents trying to be fair with their family members. Let me cite a few:

The “givers” have their own perception of what is (or should be) fair. Most people have a hard time accurately or concisely describing what “fair” is, but they sure have a strong sense of it intuitively. Often it is described in terms of being “equal”, but when pressed about specifics or circumstantial differences, the concept of equal usually fades into the background.

The “receivers” usually have a different view of fairness from the givers (and from other receivers).Most of the family members with whom I work are genuinely grateful for any gift they are (or will be) receiving. The adult children and their spouses do not appear to be greedy, unthankful or have a sense of entitlement. They understand that the “givers” have the right to do whatever they want with their possessions. Nonetheless, when probing deeper, they often express a different viewpoint of what would be “fair” in how the gifts are distributed across the family — often not to their own benefit but out of concern for one of their siblings or in-law’s.

What is “fair” changes over time (pretty easily and often). Let’s take the recent volatility in the financial markets and real estate values. Suppose, in May 2008, some parents gave one of their children $100,000 in a blue chip stock; they gave their second child a house in Atlanta worth $100,000; and they gave their third child $100,000 in cash to use as they wished. Let’s assume each child wanted and agreed to the form of the gift they received (this isn’t always true, you know). So not only were the gifts “fair”, they were exactly equal in monetary value in May 2008 (which is an unusual occurance). But fast forward to May of 2009. The blue chip stock lost 40% of its value, so it is now only worth $60,000. The home in Atlanta lost 50% of its value and can’t really be sold for virtually any price. And the $100,000 in cash is worth $102,000 after they earned 2% on it in a money market account. Are the gifts fair now? Should the parents do some additional giving to make the monetary values equal?

When do you want fairness to exist? When do the givers want things to be fair. Now? Next year? When the business sells? When everyone has completed college? When dad dies and his life insurance proceeds create cash to equalize the gifts given? When both parents die and everything will be “equaled up”? “When” is an important question to answer — for a number of reasons. First, you have the most control over events closest to the present. So “now” seems to be a pretty good option. However, you may not have the liquid assets to make everything fair now, so “now” doesn’t work for many families. Secondly, the further out the “when” is, leaves more variables to chance and the likelihood of fairness not being achieved. Is it “fair” to your second child to wait until the business sells (say in 5 years) to make things fair, and they get divorced and become a single parent needing cash flow two years from now? Or is it “fair” to the eldest child who is running the business (and buying it from you) to wait to realize their inheritance when they sell the business (potentially) in twenty years? I can run a lot of scenarios that create problems.

So what do you do? Give up on the ideal of “fairness”. Maybe, but probably not. I try to help families (usually the senior couple or single parent) clarify what being “fair” means to them, to the best of their ability currently. Secondly, answering the question “when” is critical — and it differs significantly across families. Finally, I encourage family members to think more in terms of values, rather than fairness. Since fairness is a moving target across time and is perceived differently by almost everyone involved — I find making decisions based on what is important to you as a better guideline.

Is education for the next generation important to you? Then figure out a way to fund that. Is affordable housing important? Then figure out a way to help younger family members achieve this goal. Travel? Stay-at-home moms for your grandchildren? A financial safety net? Guaranteed health insurance? Whatever is important to you — pursue that as a gift.

You will eventually have to make some decisions about what you view as being “fair” — assuming you have more than one child. Do you try to equalize your gifts to your children? Or do you try to equalize them at the grandchild level (one of your children has two kids; his sister has three kids; and the youngest has one of his own and three stepchildren)? It’s not easy. But, hey, that is what I am here for — to help you think and talk through the issues, so you can come to a decision you can live with.

Remember, you don’t have to have a lot of money or “stuff” for this to be an issue. Dividing up the household furniture and belongings raises the same issues. Whatever you do, don’t let one of your kids or grandkids (who does have a greed or entitlement issue) “guilt” you into making decisions you don’t want to.

Until then, have a great and safe New Year’s celebration.

I’ve been thinking about boundaries lately, and observing how significantly they impact our daily lives.  The lack of boundaries in relationships (or attempts to overstep established boundaries) seem to be a frequent cause of relational tension.

Obviously, there are different levels at which to consider boundaries — at the geopolitical level (e.g. the border between the United States and Mexico), in interpersonal relationships (as wonderfully explained by Cloud and Townsend in their books), and even our physical bodies (our skin provides a boundary between our body and the world around us).

I would like to use the example of our physical body to illustrate a few points about some characteristics of boundaries, and the purposes of boundaries.

First, we need to acknowledge that one purpose of a boundary is to distinguish between A (an object or person)and non-A. This is my body and it is not the same entity as the environment around it. I am me, and I am not you. We are separate beings. Although this seems simple and straightforward, there are many examples and levels at which distinguishing between A and non-A is not that clear cut. When I breathe in, is the air that is in my lungs part of me or is it still separate from me? When I perspire, at what point does the moisture cease to be part of me? The reason this issue needs to be addressed relates directly to the second point about boundaries.

Boundaries serve as a permeable “border” through which we both protect ourselves from the environment and also the mechanism through which we obtain resources and sustenance. Our skin is not a solid piece of fabric which keeps everything out nor keeps everything in. It allows the flow of information and resources between our body and the world around us — it takes in information and things we need (sunlight, moisture) and exhales information (redness of skin when irritated) and unnecessary materials.   This is true in relationships as well, either at the personal level, organizationally and politically.  We do not exist as self-sufficient beings independent from the world around us.  We interact and interchange with those around us — this is the nature of relationship.

In organizations (companies, community groups, churches, etc.) , boundaries (sometimes known as membership) help define who is and who is not part of the group.  Who can participate?  Who can provide input for direction?  Who has the rights of membership?  Who, as leaders, are we to care for and look after?  If membership in a group is unclear, then the processes of the organization become confusing and the resources can be squandered on those who are really not a part of the team.  What is required of members — what resources are they expected to bring to the organization?

Boundaries have a very direct relationship to responsibility (and often in the context of role definitiion).  What (or for whom) am I responsible?  I often see the issue of responsibility become a major source of tension in relationships — within families, family-owned businesses, companies, between businesses and customers, and businesses and vendors.  Individuals and companies who do a good job of clarifying expectations and responsibility in their relationships with others tend to have happier, non-conflictual relationships.

Let me cite some common problems with boundaries that I observe.

    1. Parents continuing to take responsibility for their children’s lives, in inappropriate ways or beyond the normal stage of life for that responsibility.  Most commonly, parents of adult children continue to take responsibility for their children’s financial well-being — rescuing them from a series of poor decisions or “helping them out” so their children will not have to experience some difficulty in their lives.

    2. Children placing responsibility (or blame) on their parents for their (the child’s) life experience.  Sometimes this is financial (”I lost my cell phone but don’t have the money to replace it.  You have money.    Therefore, you should get me a new phone.”)  But it is often at the emotional level — “I’m not happy.  I want x.  If you really cared about me, you would do x for me.  Then I’ll be happy.” 

    3. Family members confusing family and business roles.  One of the core challenges of family owned businesses is clarifying and maintaining appropriate boundaries between the family system and the business systems (ownership and management).  Often I see patriarchs wanting to help their adult children earn a good living (better than they would be able to get on their own in the marketplace) and put them in a position within the business that the individual is not qualified to handle responsibly — to the detriment of the business.  As a business owner, this is their right.  They can do whatever they want with the business they own.  However, in addition to hurting the business, this choice often leads to unintended negative consequences within the family and also often undermines the personal development of their child.

I would encourage you to reflect on the relationships in your life and examine the boundaries you have established (or attempt to).  Is the boundary too permeable?  Do you let in “toxins” from others that you need to keep out?  Or do you create such a firm boundary, keeping others at a distance and not letting them “in”, that you isolate yourself from the resources you need to live a healthy life?  Do you feel others try to place responsibility (or blame) on you that really isn’t yours to carry?  [If so, you may want to review my previous entries on dealing with dysfunctional individuals.] Additionally, in your work, pay attention to the relationships your company or organization has with others.  Are the boundaries well defined?  Is it clear who is responsible for what?  If you have ongoing conflicts with customers, vendors or strategic partners, then I would suggest you need to look closely at your boundaries, or how they are not being clearly communicated to others.