Keep and gain from family business records

Leaders of family business should carefully examine documents left behind. PHOTO | FILE | NATION MEDIA GROUP 

By PETER MUTUA

In Summary

• Leaders ought not to disregard the estates of their forbears assuming they are of little value.

A good person leaves an inheritance to his grandchildren but the wealth of the wicked is reserved for the righteous
Proverbs 13:22, ISV

When Joe was sorting out his late father’s documents, a yellowing document fell out of an envelope that had been carefully filed away.

On close observation, Joe realised the document was a life insurance policy taken when his father worked for a bank which had since changed names and ownership. Out of curiosity, Joe took it to the insurance company which, to his surprise, verified the document’s authenticity and paid the family the amount assured. They have since put the money to good use.

Like Joe’s father, Leaders of Family Business of yesteryears invested their money in a variety of instruments; some well understood at the time such as land-buying companies and others which must have appeared novel or doubtful such as shares or life insurance policies. It is unlikely that any Leader of Family Business died without having made any sort of speculative investment.

Descendants of such leaders who embark on the process of sorting their parents’ estates will, in many cases, either ignore the many documents filed by their forbears or, in the worst case, simply throw away all stray papers, imagining them to be of no present value.

Others, especially younger Leaders of Family Business, are aware of the financial potential of some of the documents they hold on hand. However, because their possible value pales in comparison to what they earn through their ventures, they opt to ignore these investments as inconsequential.

The most unfortunate are those who, even though they know that their parents made substantial investments, have no paper trail which they can follow to what was put away by their forbears. Consequently many of these languish in poverty while assets left to them by parents lie unclaimed.

The wise among succeeding generations are those who value investments made by their parents since they represent the self-sacrifice made on their behalf by their predecessors. In order to exhibit good stewardship among their own children, these Leaders of Family Business will follow through on their family’s investment even though the time input required to bring the matters to a conclusion may be high.

The reason they do this is to serve as an example to their own scions about the value of investing for future generations, in the process sowing a seed that will mature in their own children, valuing what they strive so hard to leave behind.

Leaders of Family Business ought not to disregard the estates of their forbears under the assumption they are of little value or quality. Many chance investments made in earlier times may, unbeknown to heirs, have accumulated into a sizeable estate that can be put to good use.

All leaders of family business should, therefore, take time to carefully examine documents left behind, identify which ones are linked to possible investments and take the initiative of following through with the relevant authorities.

For those Leaders of Family Business who are in relative financial need, the discovery of a financial windfall on account of an ancient investment can change the family’s fortunes for good. This creates a sense of gratitude for the work of generations.

For those leaders who are in relative comfort, financial windfalls arising from their parents, even though they appear insignificant when compared to the leader’s affluence, can give the family an opportunity to invest in activities that reinforce their family’s values. This creates a legacy for the founder(s) of the family enterprise.

All investments made by deceased Leaders of Family Business for the sake of future generations ought to be diligently taken care of, if for no other reason than to live out a good example of good stewardship to the upcoming generations.

If such examples are followed, the future of the family business and its assets is secured at least for a subsequent generation. This creates a sense of responsibility among the heirs.