Families meet all the time. From gathering for dinner to celebrating accomplishments to family vacations to educational events. Then there’s the other kind of family meeting. One that is key to building a connected, positive culture where you address important matters, like family wealth. It’s a safe place where everyone should feel comfortable discussing delicate subjects like legacy planning, inheritance, estate planning and family trust. Not only is it crucial to keep all members abreast of what’s happening, it’s also an excellent opportunity for families to grow closer to one another.
Before getting started, make sure you have a good understanding as to why they’re important in the first place so you’re well prepared when the time comes. This is part one of our three-part series exploring the use of family meetings as a tool for financial planning success.
What is the purpose of a family meeting?
A family meeting is the perfect opportunity to have an open conversation on a number of topics, from household chores to vacation planning to matters of finance. The overall purpose is to get everyone on the same page so you’re organized and prepared for whatever life throws at you. Ultimately, it brings everyone closer and makes decision making a team effort so no one feels left out.
When managed properly, family meetings can be wonderful and fun occasions that promote healthy dialogue, help you learn and develop together as well as strengthen bonds between members.
Here are some of the things that can be achieved through successful family meetings:
Learning together – This is a great time to learn what special skills each family member can bring to the table. For example, one of them may have some expertise on something that others want to learn or can benefit from. Perhaps there’s an amazing financial planner in the group or a master of scoping out affordable vacation property opportunities. Even little things, like knowing how to use apps or technology efficiently can be helpful.
Family values – Some families take this time to define what their family values are all about. It’s a great way to share beliefs about life and family that are most important, while reflecting on each other’s points in life and what they can bring to the table. Educating family members at both ends is crucial for everyone to understand each other and where they’re coming from.
Proactive problem solving – Since many families tend to avoid sensitive topics, this is the perfect time to get them out. Not only does it help make everyone feel more comfortable in the long run, it can solve a lot of smaller issues before they become bigger ones.
Support – Family members can take this opportunity to ask for support from other family members, such as asking for help with a bank loan or getting advice on a troubling situation with a neighbor.
Personal Finance – This is something that can absolutely involve the entire family, and for good reason. Not only does it keep everyone up to date with what’s going on with income, expenses and savings, but regular discussion about these matters help maintain family financial health.
Why is this important for my family?
For those with significant financial assets and/or family business activities, family meetings can be particularly helpful. The success of the next generation of wealthy families will be largely determined by the efforts used to develop them as future inheritors. It’s not enough just to have a tax efficient estate plan, it’s important to take the concrete steps to prepare your family for the future.
Research conducted by the Williams Group on 3,250 families of wealth around the world looked at transition of wealth within these families from one generation to the next. They found that 60% had a breakdown of trust and communication within the family and failed to succeed as a result (i.e., all of the wealth was dissipated by the end of the next generation).1
The opportunity to support one another increases with wealth. The potential impact of one family member’s problems on the rest of the family may also go up, especially if there’s any shared ownership. That’s why it’s important to continue to learn what you need to know from each other as life becomes more complex. It’s vital to make sure everyone is clear and aligned on family values and the vision of wealth for the next generation. And your well-managed family meeting becomes a significant resource in empowering family and individual success and well-being.
Who is invited and how often do we meet?
This is something that will depend on the size of your family and the stage of life it’s in. For example, if you have a multi-generational family business, you may benefit from having family meetings with your elder generation separately and with each branch of their children’s family separately (including spouses or grandchildren aged 15 and up). Because these types of gathering would be quite involved, you may only do them a few times a year. If you have a family with pre-teen or teenaged children, you may choose to have family meetings that involve only your immediate family. The agenda should be put together in an appropriate way so it’s relevant to them and you have buy-in by all. These meetings could happen monthly to keep everyone on the same page.
What happens if things get too emotional or feelings get hurt?
This is a common concern for families who are less comfortable with openly discussing potentially personal matters. Oftentimes, a good place to start is by educating yourself in the dos and don’ts of communication, decision-making and conflict management, depending on your situation. It will help give you some confidence in handling delicate topics and emotional moments that may arise.
How is a family meeting led?
Families that come from wealth often have natural leaders who may want to rally the troops. However, best practices in the leading of family meetings suggest that a rotating chairperson is the best way to go. This person would also be responsible for putting the agenda together.
With these few simple guidelines in mind and an understanding of the value of the family meeting, it’s time to get started planning one. Ready?
Read Part 2 of our Family Meetings series: How to Get Started With Family Meetings
1The Williams Group,1443 N. El Camino Real, Suite A, San Clemente, CA 92672.Preisser is a partner with Roy Williams at The Williams Group in California. They specialize in addressing the problem of over 2/3 of all family wealth transfers failing after transition to the next generation. The Williams Group has researched the causes of failure with 3,250 families of wealth and offers post-transition planning for families and professionals. Their services include preparing heir families for wealth and responsibility, assisting other estate planning professionals, and mentoring and coaching heirs.
Acknowledgements
BMO Private Wealth would like to gratefully thank Ruth Steverlynck of Your Family Enterprise Advisors for her efforts in preparing this handbook, and for her many contributions to our industry and the families we serve. We would also like to thank Jim Grubman of Cambridge Family Enterprise Group and Thayer Willis of Willis Management for sharing their tips on hosting effective family meetings, and Dennis Jaffe for his work supporting families of wealth as they navigate effective transition.
Information contained in this publication is based on sources such as issuer reports, statistical services and industry communications, which we believe are reliable but are not represented as accurate or complete. Opinions expressed in this publication are current opinions only and are subject to change. BMO Private Wealth accepts no liability whatsoever for any loss arising from any use of this commentary or its contents. The information, opinions, estimates, projections and other materials contained herein are not to be construed as an offer to sell, a solicitation for or an offer to buy, any products or services referenced herein (including, without limitation, any commodities, securities or other financial instruments), nor shall such information, opinions, estimates, projections and other materials be considered as investment advice, tax advice, a recommendation to enter into any transaction or an assurance or guarantee as to the expected results of any transaction.
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