Effective Estate Planning Through Family Meetings

It takes a lifetime of planning and work to build wealth. It also takes work to successfully pass your wealth to your children in a tax-efficient and equitable way. One of the key planning steps in leaving an estate is to organize a facilitated family meeting.

Why “facilitated”? It’s often difficult for the older generation to speak to the younger generation about “taboo” topics such as their death and inheritance. A formal family meeting is often one of those things that never gets done and the consequences of not having this discussion can be grave. A facilitated meeting professionalizes the process and puts a date in everyone’s calendar.

Using a trusted advisor — such as your wealth advisor — as the facilitator is generally preferred as they’ll come to the meeting with an understanding of your financial situation and likely the family dynamics. That said, some prefer the anonymity of an outside third-party. Regardless of which route you take, your facilitator should have some wisdom and good judgement. The Family Enterprise Advisor designation is an excellent credential for this role.

The role of the facilitator is to set the agenda and make sure the goals of the meeting are met. They’ll also establish some ground rules (cellphones off, no leaving the room during discussions, and so on) and will keep the conversation on track.

Ideally, the meeting should be held with all parties in person. Often families will make an event of it and go out for dinner afterwards. If children are scattered around the globe and in-person meetings are not possible, video or teleconferencing can be used.

Minor children can be included in a family meeting, but should be left out of the discussion of financial specifics until they’re older. Spouses are a trickier issue. For the first meeting, you may wish to involve only the parents and immediate children, with spouses invited to subsequent meetings.

A formalized family meeting won’t necessarily eliminate tensions and can in fact create conflict, but it’s better to have those difficult conversations now while you’re around to express your wishes rather than have them resolved by lawyers after you’re gone.

Rather than Mom and Dad’s dining room table, the family meeting should be held in a neutral offsite location. Again, this helps formalize the purpose of the meeting, and eliminates potential distractions such as ringing phones or doorbells.

Going into the meeting, the Mom and Dad should have a clear vision of their ideal outcome. Some assets may have emotional attachments, such as the family cottage or an art collection. It’s important to hear everyone’s wishes to determine the best course of action.

Key topics to cover include healthcare and personal care directives for aging elders, burial wishes, the role of an executor and the details of assets included in the will. The meeting should also cover your vision and your philanthropic views for your legacy.

A family meeting should not be considered a one-off event. Depending on the size and complexity of your estate, you may need several follow-up meetings to cover all the details. Families should consider making it an annual event to reassess if any significant life changes (divorce, health issues) impact decisions and planning.

What comes up during the discussion will sometimes surprise you. The child you think wants to inherit the family cottage may actually prefer to have the money to fund some globetrotting travel experiences. Or the child you’ve been grooming to take over the family business may have had a change of heart. The succession plan for either of those assets requires a separate series of family meetings on their own.

One of my clients is a widower with adult children. His primary concern was how much money he’d be able to pass on to his kids when he died. At the meeting, which I as their Wealth advisor facilitated, the kids made it clear that they did not want or need Dad’s money and that he should spend it on himself. He did admit that he’d always wanted to drive a Bentley. The meeting amicably ended when one of the children said, “Dad, buy the Bentley.”