Making Wealth Planning a Family Tradition: Part 2
FAMILY MEETINGS – SET THE STAGE / AN INVITATION TO THE TABLE
Depending on the topics you choose for family meetings, you may wish to delineate who should be part of each conversation. Very personal matters may need to be addressed with immediate family first. Eventually, you may want to invite in-laws and grandchildren; then include your professional advisors to help you take action on follow-up items. The point here is to define for yourself who needs to know what and when they should be privy to the information. Sensitive subjects should be broached carefully, in order to build consensus among decision-makers. As you invite the relevant players to the table, consider what roles they’ll play. Is one more financially savvy, one the family historian, one more responsible than others? You may want to assign a different person to communicate with the family attorney, accountant or trustee; to update your Financial Advisor who serves at the quarterback, to spearhead the family’s philanthropic endeavors and to serve as the family educator. Capitalize on each person’s skill set to keep the lines of communication open, lend a sense of accountability and keep everyone engaged during the meetings. You can always switch up the roles in subsequent gatherings, so no one feels unduly burdened or left out. Consider assigning a family secretary to keep track of action items and to document what decisions were made.
MEETING LOCATIONS (WHEN AND WHERE)
If you and your loved ones live near each other, picking the time and place for your family meeting may be as straightforward as inviting them over for an extended dinner. However, if everyone is spread out, finding a good time to get together may take a bit more planning. Do you have a family reunion coming up or are you due to schedule one? If a family vacation is in the works, consider tacking on an extra day to talk about the future and your wishes. When choosing the location for your meeting, think about where you will all feel most comfortable. Perhaps it’s somewhere familiar like your home or a more formal setting like your Financial Advisor’s office, where he or she can serve as a mediator. Maybe you’d prefer someplace completely neutral like a hotel or an intimate restaurant or coffee shop. How often will – or should – you meet? And where? With many variables at play, this will depend on your family’s unique situation and needs. You may find you need one or two longer in-person meetings to get going, followed by shorter gatherings held semiannually or annually via videoconference, if distance is a factor. Or perhaps you’d prefer casual but regular meetings held monthly or bimonthly. You might find that after your initial conversation you’re better able to gauge what will work best for you and your loved ones.
SHARE YOUR HISTORY
All too often, family wealth deteriorates in just three generations. A part of the problem is that younger generations don’t understand what it took to build wealth in the first place – so use these conversations as an opportunity to tell the story. Before delving into heavier territory, set the tone with a little family history. Share how your family’s wealth or business was built, what worked and what didn’t. Not only will the details create understanding, but hopefully, they’ll also inspire the next generation to uphold what your family stands for and prepare them to be good stewards of family wealth.
OPEN MINDS, OPEN ARMS, OPEN DISCUSSIONS
Now comes the harder part…Actually having a purposeful discussion. It’s important to create a safe haven – a place where questions and concerns can be raised. A place where all voices will be heard. It’s unrealistic to expect everyone to get along, at all times, or to assume every family member will be level-headed and pragmatic when making important decisions. Take some time to think of the main points you’d like to discuss and make a checklist or agenda as a point of reference. Discussions about money and family can be a volatile mix. Some families use money as a form of control, for example, engendering resentment and creating a divisive atmosphere – running counter to the point of a family meeting that is supposed to inspire unity and understanding. Expect and allow for the expression of emotion, to a point, then rein it back in so the meeting will be more effective. Of course, all families have their skeletons, black sheep or favored children, but everyone will appreciate an effort to keep the discussion forward-looking. Should your conversation remain heated, consider taking a break and regrouping later with a neutral third party – a family friend, a psychologist, your Financial Advisor or an estate attorney – to help referee the conversation. Once order is restored, you can address the prickly issues. For example, say you own a successful business and are preparing your eldest to be your successor, how will your other children feel? How do you make things equitable among them? What if you have a child whose career hasn’t blossomed as much as those of your other children and who needs financial assistance? How will you decide? An open discussion can be very revealing as families let go of emotional baggage and come together to talk about what’s important to them, like the meaning of charity, family, community and the value of money. Create a space where your family will be willing to share their own views. You may just learn something new and find a sense of comfort when it comes time to pass the baton to the next generation.
MEETING AGENDA
Sharing more than wealth while facilitating a family meeting may take some time, thought and planning. Going through this exercise with your loved ones can go a long way in making your wishes for your legacy a reality. And while the conversations you’ll have can also be challenging, creating an opportunity for you all to express your hopes and concerns can leave everyone feeling more confident about the future. As always, don’t forget to tap into your Financial Advisor at any point to serve as a neutral mediator or sounding board.
SUMMARY
This article serves as a comprehensive guide for facilitating thoughtful conversations and ongoing communication about your family’s assets, values and future. These ideas and strategies are intended to help make managing family wealth and its transition through the generations a more productive & rewarding process, as you pursue your well-deserved longevity and legacy goals.
Edward Lynch, MBA, AAMS®, AIF® – Private Wealth Advisor
President & CEO, Lynch Wealth Strategies, Inc.
Army Lieutenant Colonel (Retired) – 28 Years of Military Service
3 Coates Drive, Suite 5, Goshen, NY 10924 – 845-294-3456
www.LynchWealthStrategies.com ; Edward.Lynch@raymondjames.com
The material is general in nature. Securities offered through Raymond James Financial Services, member FINRA / SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Lynch Wealth Strategies is not a registered broker/dealer and is independent of Raymond James Financial Services.
Private Wealth Advisor is a designation awarded by Raymond James to financial advisors who have demonstrated mastery in anticipating and managing the expansive financial needs of high-net-worth individuals, families and organizations.
Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
This material is being provided for information purposes only. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Edward Lynch and not necessarily those of Raymond James.
