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Estate Planning for Impulsive Entrepreneurs

It is important to distinguish between risky behavior and sub-optimal decision-making.

Isaiah Berlin, a philosopher of the 20th century, once distinguished between two types of decision-making: the hedgehog and the fox. The hedgehog knows everything about one great thing, while the fox knows something about many small things. Most estate planners adopt a hedgehog mindset, possessing extensive knowledge about all aspects of estate planning. This approach generally works well for most individuals, but there are cases where a more fox-like decision-making process is necessary, although much more challenging. This is particularly true for entrepreneurs and individuals with ADHD.

But why entrepreneurs and people with ADHD? Because they often make impulsive, sub-optimal decisions, prioritizing immediate rewards over long-term gains. This tendency extends to planning, organization, self-regulation and prioritization—the essential skills needed to make informed choices. Like a fox overwhelmed by a henhouse full of chickens, they can suffer from “analysis paralysis,” fearing the consequences of making wrong decisions based on past experiences or future uncertainties. This fear of decision-making leads to stagnation, often requiring others to make decisions on their behalf. In the context of estate planning, this “other person” refers to the state and federal government.

It is important to distinguish between risky behavior and sub-optimal decision-making. Entrepreneurs and individuals with ADHD are, in fact, more risk-averse than the general population. However, they excel at making quick decisions when faced with unpredictable circumstances, where time does not permit lengthy and thoughtful processes to find the optimal choice. They rely on action-based decisions and adapt to inherently uncertain situations on the go. What both entrepreneurs and individuals with ADHD need, outside of crisis situations, is a prediction-based decision-making process. In other words, they should feel comfortable switching between a fox-like and hedgehog-like approach, or at the very least, enlisting the aid of a hedgehog to assist them.

Here is an outline of two decision-making processes: one resembling a fox, focused on quick action, and the other resembling a hedgehog, centered on careful prediction.

Fox-like, action-based decision process:

  1. Clearly define your desired outcome.
  2. Assess the risks you are willing and able to take.
  3. Take decisive and swift action, utilizing available resources and information.
    a. Bring along trusted individuals.
    b. Minimize risks whenever possible.
  4. Evaluate whether the results align with your initial goal.
    a. If they do, repeat the process.
    b. If not, reevaluate your desired outcome.

Hedgehog-like, prediction-based decision process:

  1. Articulate your decision by clearly stating your goal.
  2. Define the specific objectives that will lead you closer to your goal.
  3. Identify the objectives that are most at risk of not being achieved.
  4. Explore alternative strategies to address the lagging objectives, and assess each strategy:
    a. Will the strategy be sufficient to achieve the objective?
    b. Is the strategy necessary to achieve the objective?
    c. Is the strategy feasible given the current circumstances?
    d. Is there a concrete action plan for implementing the strategy?
  5. Analyze the risks and trade-offs associated with the selected strategy.
  6. Choose and execute an action plan based on the selected strategy.

By following these processes, you can make informed decisions that align with your goals while considering both immediate action and future outcomes.

Here’s how I integrate both action-based and prediction-based estate planning to be both a fox and a hedgehog for entrepreneurs and individuals with ADHD:

  1. Determine your goal—what you need now and how it aligns with your future aspirations.
  2. Develop scenario plans outlining the necessary steps to achieve your goal.
  3. Assess the immediate situation: is it both urgent and important?
  4. Act using available resources, skills, and contacts to reduce uncertainty in the immediate situation.
  5. Incorporate insights from your actions into your scenarios.
  6. Once the crisis subsides, progress toward the objectives outlined in your scenario plan.
  7. Prepare for the next potential emergency.

If you’re an entrepreneur or an individual with ADHD in need of estate planning or any decision-making process, consider these helpful tips:

  • Document your goal and scenarios to think through the process thoroughly. Remember, if it’s not written down, it may not hold weight legally.
  • In a crisis, acting is better than doing nothing, even if it’s not optimal.
  • Find someone to whom you can declare your goals and objectives, allowing them to hold you accountable.
  • Record and learn from your accomplishments and failures.
  • Set public deadlines and enlist support to ensure timely completion.
  • Shift your perspective—estate planning is about shaping how you want to live, not just preparing for the end of life.

If the hedgehog approach doesn’t resonate with you as a fox, don’t lose hope—there’s a process that suits your style. If you’re prone to analysis paralysis, seek a fox’s perspective to make swift decisions and learn from the outcomes. If impulsive decisions are common, find a hedgehog dictator to help temper your impulses. Remember, acting is always better than inaction.

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