Money, coupled with sometimes complicated family dynamics, can bring its own gravitational pull that can be distracting and interfere with the parents’ ability to communicate their own values and estate planning needs. Family meetings can help facilitate a transfer of family values from one generation to the next.
A recent survey asked Americans aged 45 years and older, “What’s most important to pass on to the next generation?” The consulting firm, Age Wave Consulting, was surprised to find the #1 answer – from 74% of the respondents – was “values and life lessons.” The answer “financial assets or real estate” came in last. Ranked in between were “instructions and wishes to be fulfilled” and “personal possessions of emotional value.”
It is easy to simply pass on financial assets and hope your values go with it. Unless you have a legacy plan that you have created and attended to with the same thoughtfulness you give to your wealth management, many successful families fall into the trap of “shirtsleeves to shirtsleeves in three generations,” meaning that the wealth gained in one generation is lost by the third generation. Despite having financial advantages, a lack of guidance can lead to your heirs feeling unmotivated, unhappy or unsuccessful, and they may not fully utilize all of the advantages that come with the financial assets or legacy plan that you are leaving behind.
One of the difficulties of legacy planning is that estate planning traditionally focuses more on the legal documents and financial techniques needed to transfer tangible assets, and pays little attention to talking about and sharing your thoughts on what you would like your children or grandchildren to learn about your values.
Family meetings are one way you can facilitate this transfer of knowledge. If they are done well, and with professional support, we find that most adult children are thankful that their parents gathered them together to:
Having a third-party facilitator can help keep the meetings focused, productive, and remove a level of emotion that may arise from having these kinds of difficult conversations. We are often asked to serve as the family’s trusted advisors at these kinds of meetings. In this role, we facilitate the discussion, providing the wealth creators the opportunity to share their wishes with their loved ones (including end of life decisions), convey expectations for handling of financial assets, and help resolve family conflicts in a comfortable environment.
Most of us think we are done with estate planning when we sign the last documents in that big binder that holds our wills and trusts. In reality, addressing your tangible assets is only the starting point – being proactive about discussing your intangible legacy can be even more impactful for the next generation, and crucial to helping them navigate your legacy. A family meeting can provide you and your family with peace of mind. Please contact your advisor if you are interested in our help facilitating your own family meeting.
Don’t have an estate plan yet? Here are some ways to get started:
Estate Planning Basics
Lost Planning Opportunities with Drew Kanaly
Best Practices in Estate Planning
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