Key Takeaways
- Many families have financial and estate planning strategies in place, but few have talked with their loved ones about what these strategies mean.
- Regular, deliberately designed family meetings are one of the most effective ways to pass down your values, avoid family conflicts and ensure your loved ones are on the same page, financially.
- An experienced financial advisor can help you prepare and serve as an objective facilitator for your family meeting.
Many families have financial and estate planning strategies in place, but far fewer have talked with their loved ones about what these strategies mean. However, a lack of clear communication can lead to a breakdown of trust, family conflict and heirs who are unprepared to manage family wealth. One of the most effective ways to communicate with loved ones is through regular, deliberately designed family meetings.
Why Hold Family Meetings?
Family meetings provide an opportunity to share your financial values and expectations and solicit open, honest feedback from those you love. They allow everyone in your family to get on the same page when it comes to financial matters so that no one is surprised or unaware when an unexpected event occurs. Having these open conversations can help prevent family drama or conflict down the road because everyone knows what to expect. While no conversation can eliminate every future disagreement, family meetings can significantly reduce misunderstandings and provide a framework for navigating difficult decisions together.
Family Meeting Strategies
The most effective family meetings are carefully considered and planned out. While it is impossible to know exactly where the conversation will lead, there are some steps you can take to prepare for a productive discussion.
Ensure you are on the same page as your spouse
The fastest way to derail a meeting is by discovering in front of your children that you and your spouse disagree on timing, transparency or what “fair” means. Before scheduling your meeting, have a conversation with your spouse about your values, your goals and what you both hope to accomplish with your wealth. Approaching your meeting as a unified team can help everyone get on the same page.
Lead with values, not dollars
Starting with a balance is one of the most common mistakes made during family wealth conversations. Numbers without context can result in two unintended reactions: entitlement or anxiety. Neither is a healthy way to start the conversation.
Instead of giving specific numbers, consider starting the conversation with an explanation of how your wealth was built, including investments of time and money, specific sacrifices made by those who built the wealth, mistakes and lessons learned, and the responsibilities that come with stewarding wealth.
A conversation that starts with, “I want you to know why we structured things the way we did” is very different from a conversation that starts with, “Here is how much you will receive some day.” The first fosters a sense of responsibility and shared values, while the second can lead to feelings of entitlement and a lack of motivation.
As you are talking about values, be sure to ask your loved ones what money represents to them. This is a great way to understand your family members’ values related to security, freedom, philanthropy, education, hard work, entrepreneurship, etc. Each individual’s values may reshape some of your strategies and the support you aim to provide.
Be prepared
Before your meeting, take time to list out all relevant details, such as accounts, insurance policies, trusts, estate planning documents, etc. Be prepared to discuss your values, legacy goals and plans for each heir. Also be prepared to discuss who you plan to name as a trustee, executor, etc., as well as the reason behind your decision in case your loved ones ask.
Keep in mind, however, that it is not necessary to share specific details, such as account balances or net worth. In fact, sharing specific asset levels has the potential to lead to unintended consequences, especially if your heirs think they can rely on your wealth for their future financial security. The appropriate level of financial disclosure varies from family to family. The goal is not complete transparency but rather thoughtful preparation.
Carefully consider the meeting’s time and place
While it may be tempting to schedule your meeting during a time when everyone is already gathered, such as a holiday, family wedding, funeral, etc., it is typically wise to avoid this approach, as emotions tend to run high during major family events. Instead, schedule a meeting that is independent of other family gatherings. Give each family member plenty of notice to prepare, and choose a quiet, private location where you can all talk comfortably.
Ask for input
An open, honest discussion provides an opportunity for your family members to share their feedback and concerns. You may receive input you had not previously considered that could require a change in your strategies. Or you could learn that your loved ones’ views are not aligned with your own. For example, the child you had selected to take over the family business may have other ideas for his or her career.
Throughout your discussion, make sure you are asking questions such as:
- “What are your biggest financial priorities and challenges?”
- “What are you worried about?”
- “What is on your mind that I am not considering?”
It is also important to avoid confusing silence with agreement. It takes some people longer to process than others, so you may need to check in with a quiet loved one a few days after the meeting to talk about his or her response to the discussion.
How United Capital Can Help
The experienced financial advisors at United Capital can support you in having difficult conversations with your loved ones. Your advisor can serve as an unbiased facilitator to keep your conversation on track, help you overcome challenging family dynamics and assist your loved ones in finding their voice. Having your advisor in the room can also help relieve the pressure of having to provide the answers to difficult questions or explain complex decisions.
For help planning for your upcoming family meeting, please schedule a call with a member of our team.
