Dictonary.com defines the word legacy as “… a gift of property, especially personal property, as money, by will; a bequest” and as “… anything handed down from the past, as from an ancestor or predecessor.”
The word is derived from the Middle English word legacie, meaning “office of a deputy or legate.”
Legate (in Latin, legatus) is defined as “an ambassador, envoy or emissary.” In Roman history, this was someone appointed by the emperor of Rome to govern in a Roman province. Eventually this came to mean, in the Catholic Church, someone delegated by the Pope as his representative.
So in its derivation, the term “legacy” was originally associated with an action—being sent on a mission to represent a third party to others. Yet, in its current definition and usage today, “legacy” most often refers to an object: a legal structure, such as a charitable trust or a family foundation; or a physical object—a thriving business, a sum of money, a building on a college campus and so on.
If we think of “legacy” as referring to an object, then our attention and consideration are drawn to the object. But what if we think of “legacy” in its original derivation—as referring to an envoy, or an emissary, or as someone who is sent on a mission? In that case, our attention may be drawn less to the object and more to the people whose mission it is to deliver the object.
These different interpretations of the word have powerful implications for families, and their efforts to secure something lasting in life.
Interpretations In Action
A Korean-American businessman and his wife funded a family foundation when their two sons were in their teens. The foundation, whose gifts were restricted to preserving Korean culture in America, was intended to keep the family together and to keep the parents’ legacy alive. Each of the two children was entitled to a seat on the foundation board when he turned 25. And as each son reached that age, he dutifully took his seat on the board. The foundation functioned well for a few years, but eventually the children found themselves increasingly distant from the foundation’s goals and in conflict with their parents. One son went to university in the United Kingdom and settled there, working as an investment banker with his Western wife. The second son wanted to explore his Korean roots after he completed college and moved to Korea, where he settled with his Korean wife. Both sons wanted to continue working for the foundation as directors, but they both believed that the restriction of gifts to the preservation of Korean culture in America was far too restrictive and narrow. What about Korean culture in Western countries outside the U.S., or in Korea itself? The parents were adamant that their legacy would be Korean culture in America (after all, both parents’ families had immigrated to the U.S. and done well there), and they demanded their sons’ agreement and obedience. Eventually the conflict over the family foundation tore the family apart: Both sons resigned their seats on the board and stopped attending meetings. Today, the foundation is a source of pain and regret in a family whose relationships have been devastated by this disagreement.
In another family, based in the U.S., the second-generation leader of a very successful family business created a series of trusts whose beneficiaries were his four children. The trusts were designed so that distributions from shares held in the family company could be used to purchase additional shares that could be held in individual investment accounts. “There’s no better investment,” the dad repeatedly stated to his children. “This was my father’s legacy to me. And this is my legacy to you.” The trusts performed exactly as planned and built up considerable wealth for all the children—but almost 100% of that wealth was invested in the family company. The children, now adults, and now acting as co-trustees of their own trusts, began to assume more and more responsibility for managing their personal wealth. And, being educated and informed investors, they all began to consider whether to slow down the purchase of stock in the family company, or to stop buying the stock altogether, in order to diversify their assets. But they were all reluctant to take that step because they believed that their father would be hurt by that action, and that his legacy to the family would be destroyed. Nevertheless, with the encouragement of several key advisors, a family meeting was held and the children presented to their father a proposal to diversify, along with their understanding of the hurt this could cause him. He thought for a moment and then began to laugh. “Why the laughter?” he was asked. “Because I don’t want the company’s shares to be my legacy. It’s the freedom of what you all could do with the shares that’s my legacy!” And so the decision to diversify was approved. But the story actually continues: Although the diversification was approved, none of the children took advantage of the opportunity. They are all still buying stock in the company—and nicely building their wealth.
These two vignettes, drawn from the experiences of real families (though with identifying information disguised) illustrate two very different interpretations of the meaning of a legacy, with two correspondingly different outcomes. In the first family, the focus was on a structure: The purpose of the family foundation (the structure) was held to be immutable and unresponsive to the sons’ wishes. As a result, the parents’ intended legacy (a family foundation run collaboratively by family members for generations) was virtually destroyed (though the foundation’s funds themselves remained intact). The second family focused on people: The meaning of the family’s legacy itself was redefined in the third generation as a gift of “freedom to choose” rather than as “shares in a business”; as such, the family legacy will probably be passed on intact for at least one more generation.