Why You Should Hold a Family Financial Meeting: Planning for the Future
When thinking about family gatherings, you might focus on special occasions like holiday meals, birthday parties and anniversary celebrations. These are all good reasons to bring generations together, but there’s another family gathering that’s equally important: the family financial meeting.
Granted, discussing your health care needs and estate plans can be difficult and uncomfortable, but it benefits the entire family when everyone’s on the same page regarding your intentions. Financial matters can be emotional and contentious, so a transparent discussion may reduce misunderstandings, disagreements and conflict. In turn, you’ll gain peace of mind knowing your legacy wishes have been fully and effectively expressed, discussed and understood.
What topics should be discussed in a family financial meeting?
You know best how your family dynamics tend to play out, so take them into consideration when deciding who should attend the meeting. It makes sense to include all the children, but whether their spouses/partners and children are invited is your decision based on best judgement. The frequency of financial meetings depends on the circumstances, but it’s often valuable to hold one whenever there’s a significant change, such as retirement, death in the family or a notable monetary event like a business sale or recent inheritance.
Here are seven topics commonly broached at family financial meetings:
1. Living arrangements
(e.g., aging in place; downsizing; staying with family; residing in a seniors community/nursing home).
If the intent is to move in with family down the road, who is best suited and willing to open their home? If the idea is to make the shift to a retirement residence at some point it might be prudent to start your search a few years ahead due to the long wait lists.
Look at what each place has to offer, amenities that might attract you and locations that might be most convenient i.e., close to where your children live. Maybe even discuss putting your name on the list early, so that when the times comes for you to make the move, you are ready. All this should be discussed as a family.
2. What to do with the family cottage or other properties.
Is there sufficient tax to keep an asset like a cottage in the family? What do you do if some but not all are interested in keeping it, maybe location of the cottage is an issue for some. How do you equalize the estate to make it fair for everyone else if it’s not being shared?
3. Your choices for executor and power of attorney, along with the reasons why.
Choosing an executor and power of attorneys are not easy decisions to make. If you are married the decision is rather easy, however if your next of kin is now your children, choosing who you want to be responsible for executing your Will should be discussed.
Where your children live should be taken into consideration as well. Who will have the easiest time settling your estate?
4. Intention and directions for potential incapacitation, end-of-life care and funeral proceedings
Selecting who will have power of attorney over your personal care is also a big discussion. Do your children know your wishes about end-of-life care? Are they comfortable with enacting those decisions for you when you can’t.
5. Wealth distribution as part of your estate plan
(e.g., how you want to divide your assets and special possessions, whether grandchildren are included, your philanthropic goals); provide a rationale for these decisions so your loved ones understand the “why”
Explaining why you have chosen to bequeath your assets in your Will is always a good idea, especially if there are directions in your Will that might come as a surprise to your family. Also, not every fine detail will be written in the Will. If you have special goals for certain personal assets, this should be discussed with everyone to avoid conflict arising when settling an estate. The more details you provide now, and in writing will help a great deal at your time of death.
6. If you own a business, what’s your succession plan? Will family members be involved? Will you sell?
For many who own and operate their own business, the goal is often that your children might one day be your succession plan and take over. Do they know this? Is this something that is their passion too? Maybe one child would like to take over the business, but the other might not and how will all that work out. It’s never too early to start this conversation.
7. If you have insurance coverage, inform your loved ones about policy details
Discussing what life insurance you have in place and where is something you should be discussing with your family. Especially if they are unaware of who your advisors are or where you might hold life insurance.
The family meeting is also an opportunity to discuss the “softer side” of finances, such as your views on money, the struggles you may have faced when building wealth, and how you envision loved ones managing their own finances/inheritance. Imparting wisdom you’ve gained over the years is a great way for family to learn from you and engage in meaningful dialogue about money and financial responsibility.
What makes a successful family meeting?
Emphasize that this isn’t a typical gathering, although a social component could be added once the formalities conclude. Try to strike a balanced tone: it’s a serious financial meeting with weighty or emotional topics, but it doesn’t need to be sombre. Investment Advisors, Lawyers and Accountants usually don’t attend, but we can certainly be involved in meeting preparation, especially helping to explain technical terms or complex concepts you may need to address. Give people enough time to digest all the information. Since you might not resolve everything in one go, book a follow-up meeting if needed.
In-person conversations are ideal because it’s easier to “read the room” and communicate effectively, but if some people can’t attend, a virtual or hybrid meeting may work. You could hold the meeting at your home for familiarity’s sake, but anywhere that’s comfortable, reasonably free of distractions and conducive to open discussion will suffice. Create and distribute an agenda in advance so participants are aware of the subject matter and can prepare questions or comments.
When your meeting ends, summarize the discussion, share next steps and assign required roles and responsibilities. Be sure to keep your advisor and related professionals abreast of decisions emanating from your family meeting, so we may continue advising you in the best way possible.
If you haven’t already completed one, check out our Executor Diary. It’s a document that itemizes the details and location of all the information your executor will need to settle your Estate. Feel free to also share this document with someone who might find this a valuable tool.