Best Practices for a Family Meeting about Wealth

 

Communication is key.

 

This is a phrase you’ve likely heard more times than you can count, but it is sometimes easier said than done. For example, you may find it easy to talk with your family about your social activities and current events, but have you talked with them about your estate plan? How about your family values, or the legacy you’d like to leave? While these topics can sometimes feel taboo, when they’re brought up in the proper environment, the upside of discussing them far outweighs any initial discomfort.

 

With a little planning, a family meeting can be that proper environment. This provides the space to not only discuss financial essentials, but also increase your family bond. Start by establishing a code of conduct for the meeting to ensure everyone feels heard and can have their fair share of time to discuss what they want. Your code might include no interrupting, for example, or no raising of voices. Write your guidelines down on paper and have everyone sign it as a promise to stick to them.

 

Once your meeting is planned, the exact subjects you’ll discuss will vary based on your family needs. The following are some suggestions for different ways that wealth planning might play a role in your talks.

Develop your family mission statement

Developing a family mission statement — or a unified expression from all members of your family regarding the principles that matter most to you— helps everyone move forward with those specific objectives in mind. Some questions to ask that can help you develop your statement might be:

 

• How does our past dictate where we are today? For example, are there charities, churches, locations, or other organizations that are important to you that you would like to play a role in, financially.
• What are our values, and how are they reflected in the financial decisions we make?
• What do we want our legacy to be?

 

Coming up with answers to these can help guide your family’s actions when it comes to making meaningful financial decisions, as well as help avoid situations that risk the family reputation.

Discuss family behavior guidelines

Speaking of reputation risks, your family members probably understand that how they conduct themselves outside of the four walls of your family get-togethers has an impact on your family’s larger legacy in the world. Still, it’s worth taking the time to talk about how individual choices and behaviors reflect and impact the reputation — and potentially even the finances — of everyone else in the room. Along with your mission statement, try establishing some concrete behavioral guidelines (or dos and don’ts) for everyone to aspire to so that everyone is on the same page and there’s less room for misunderstanding.

Communicate your estate and wealth transfer goals

It’s essential that you share your plan with your loved ones. This doesn’t mean turning over a copy of your balance sheet, but rather talking with them about your intentions – how do your documents work, as opposed to what they will receive and when. This will allow them to understand what’s expected of them when you pass and to ask questions or receive clarification while you are still alive. Some things to cover include:

 

• What does your estate plan entail? Do you have a will, or a trust? What type of trust?
• What do you hope to achieve with your wealth or estate plan? Include discussions on any core documents you have, including Powers of Attorney and Health Care Directives.
• Let the people who will play an important role — beneficiaries, guardians, POAs, etc. — know that you’ve designated them those responsibilities, and what they entail.

Pass financial education along to the next generation

Different family members will have expertise in different areas of finance. Using the family meeting to share that knowledge helps the entire family succeed. Some topics to consider for educational purposes include:

 

• Financial planning: A good financial plan includes evaluating your overall income, spending, savings, and debt, and setting expectations to reach financial goals.
• Estate planning: Beyond your financial plan, an estate plan dictates what happens to your wealth and assets when you pass. It also includes essential documents that list who will make your decisions — both health and money related — if you are unable to make those decisions yourself.
• Investing 101: This might include stock market basics, the pros and cons of different types of retirement accounts, and other investment vehicles that provide exposure to the stock market or help your money grow.

 

Setting up rules might seem frivolous when we’re talking about a conversation with your family, but that’s all the more reason why it’s important. Even with all these preparations in place, family meetings can still get emotional. If you’ve already found that arguments tend to break out at your family discussions about wealth, using an intermediary can help. This can be anyone from a trusted friend to a professional, like the family lawyer, wealth advisor or an actual counselor. Remember that at the end of the day everyone’s goal is the same: To ensure that your family wealth fosters your collective family goals and values.