Financial Planning

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Over the next several decades, the biggest and wealthiest generation in U.S. history will transfer roughly $30 trillion in assets to their Gen X and millennial children. At Intelligent Investing, one of our four unique factors is to improve financial communication between families. We do that by being a communication bridge between generations. Every generation thinks differently than other generations. Knowing how to communicate with multiple generations is vital. Many families do not want to discuss this topic because of blended families or past bad experiences. However, here are some helpful considerations for creating a family meeting that will allow you to talk to your heirs about your end-of-life decisions.

Discuss your Family Legacy

One of Intelligent Investing’s Core Values is Legacy. We believe it is more important to pass on family values than it is to pass on valuables. The head of the family should take some time in recounting stories of your family history. Perhaps you can share what values are important to you, and a time in your life when those values were challenged. By sharing your values with your children and grandchildren, you are setting them up to be better managers of the resources you may be entrusting to them. What better time to impart nuggets of wisdom you have attained over the years. Perhaps you want to instill a sense of hard work, persistence, patience, or other virtues into the younger generations. Perhaps you could write down, “Five lessons I’ve learned over the years related to money.”

We believe it is more important to pass on family values than it is to pass on valuables. Share on X

Create Proper Expectations.

The key to any communication is to set proper and transparent expectations. It is important to address preconceived expectations as well. Once you have found a neutral private location for the meeting, you may want to begin with two questions:

1. The family head answers, “Why are we doing this?”
2. He asks the family members, “What would you like to get out of this meeting?”

By setting the right expectations for the meeting and allowing time to listen to everyone’s responses, you will set the right tone.

Answer Heirs’ Questions

As the family head learns what the others would like to get out of the meeting, he can address them specifically. Many times family members will have been contemplating questions or issues but will not have addressed them in the past. Perhaps they have addressed them with other heirs or siblings, but not with the family head. This is a great time to get the questions on the table to hear the family head answer them directly.

Wealth Transfer Process and Plans

A primary goal of the family meeting should be to clearly communicate the family head’s intentions regarding his or her estate plan. Be sure to clarify important details, such as who is the executor (personal representative) of your estate, where your will and important information is stored, and, of course, who will get what. You don’t want families to split and siblings not speak to each other after mom and dad pass away due to missed expectations. Explain the process you have gone through in order to arrive at the decisions you are sharing. Explaining the “Why’s” behind the decisions can be valuable as sharing the “What’s” and “How’s.” How do you hope the estate resources will provide new opportunities for the family members?

If there are some financial complexities, such as trusts, insurance policies, beneficiary IRAs, or other accounts that have tax ramifications, we can bridge the gap and explain how these various accounts affect the next generation and ways to mitigate potential traps.

Healthcare

This meeting may be a time for the patriarch or matriarch to share his or her end-of-life desires. Perhaps he wants family members to know that he has a do not resuscitate (DNR) clause. A DNR also known as no code or allow natural death, is a legal order written either in the hospital or on a legal form to withhold cardiopulmonary resuscitation (CPR) or advanced cardiac life support (ACLS), in respect of the wishes of a patient in case his heart was to stop or he was to stop breathing. The DNR request is usually made by the patient or health care power of attorney and allows the medical teams taking care of them to respect his or her wishes. The head of the family may want to discuss his or her long-term care insurance policies, whom he has appointed as health care power of attorney, or his nursing home preferences and wishes.

Lifetime (Current) Giving

There is nothing wrong with making inter vivos (Latin, “between the living”- a legal term referring to a transfer or gift made during one’s lifetime) gifts. In fact, it can be very satisfying seeing your children and grandchildren using the resources you have given them to make financial decisions where you see the fruit of those decisions. Some families make giving a family affair, choosing the charities collectively. If your children are involved in the decision making, they will gain firsthand exposure to your generosity, and may be more apt to continue the generosity you have established. At Intelligent Investing, we can setup a Donor Advised Fund or Foundation and let all family members participate in choosing which charities and non-profit ministries are important.

Next Steps

Our clients can host a multi-generational family meeting in which Intelligent Investing bridges the potential awkwardness while addressing specific financial questions and emotional topics. We can assist the family head in creating an agenda for the meeting but may take a back seat when the discussions begin. We think this is a vital meeting to have before a family crisis forces the conversation at a more awkward time with higher emotions present.

We work predominantly with high net worth individuals and institutions who have between $500k to $5M of investable assets. If you’d like to learn more about becoming an Intelligent Investor, click here to call or set an appointment. 

Complex Charitable Giving Strategies

If you are interested in learning more about various charitable giving strategies, consider downloading our Charitable Giving article below.

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