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Family, Legacy and the Importance of Communication

Success After Succession

THE ESSENTIAL ELEMENTS FOR SUCCESSFUL FAMILY WEALTH TRANSFERS

It is inevitable--every day we get a little bit older. The time to begin planning for the next generation is now. As successful heads of your family, you have worked very hard saving for your future, taking care of your family and creating a plan for retirement. It’s possible that with a few additional conversations, you can create a legacy that your children and grandchildren may continue to enjoy for generations to come.

The complexities of the family and the amount of wealth transferring to the next generation can help determine how much time and effort will be required in the planning stages to ensure a successful transfer. If you would like the transfer of your wealth to benefit the next generation, then you need to consider involving your family early. It is important for each generation to try to understand each other’s perspectives regarding the shifting of assets and the impact these assets may have on their future.

Talking about estate planning, retirement planning, elder care and what will happen to investments is not an easy discussion, but it is paramount to ensuring that a family’s wealth is protected before a transfer takes place. In this article, we identify some of the key issues involved in family wealth transfers and the emotional and practical aspects of the process.

TALK - Family Money Meetings


• Talk - Have family discussions about money long before they are critical
• Ask - Ask a lot of questions to make sure you understand the details
• Listen - Listen to each other and be understanding of one another’s wants, needs, and emotions
• Keep it up - Continue the conversation- it doesn’t need to only happen once

WHAT ARE WE DISCUSSING?

Goals and Objectives: What are some of the goals of the patriarch or head of household? In a best case scenario, how do they envision the transfer taking place? Use these beginning conversations as opportunities to discover the expectations of all parties involved. A financial advisor would be very beneficial at this juncture. As a mediator, they can help everyone gain clarity on the future and serve as an objective resource, explaining and educating the parties involved. It is important to be as detailed as possible and every situation is unique. For example, if elder parents are planning to retire abroad who will care for them in the event of serious illness? If one child of a few does not wish to participate in the family business how are adjustments made?

Estate Plan: One the goals and objections regarding the transfer of wealth are in place, it is important to detail these objectives in an estate plan. All documents should be reviewed on a timely basis to ensure all information is current. Older family members should make decisions about their care in the event they become incapacitated. Is there a plan for someone to take care of them? Who would have powers of attorney over their assets? Who is the executor or trustee of their estate in the event of their death? The parents have the opportunity to make these decisions for themselves and detail such elections in their estate planning documents, with the help of a trusted estate planning attorney.

Key Documents and Digital Assets: It is important that everyone knows where key documents and papers are stored. Parents should make a list of their key documents and keep it updated. This includes online accounts, logins, passwords, etc. Children can help their parents determine what documents are in place and which may need updating.

HOW CAN WE HELP?


Intra-generational wealth transfers are unique to the circumstances of each family. A financial advisor can act as a sounding board for ideas, goals, and values surrounding the transfer of money. For the children, financial advisors can help them understand the issues involved with the wealth transfer and some questions to ask so that they can gain clarity and feel more secure in the process.

A financial advisor is a great resource to help moderate and facilitate a family financial conversation. Discussing family finances can be very emotional. Working with an advisor by your side can help remove some of the emotion so each family member is able to make the best decisions for their families. As experienced financial professionals who have seen a number of different family situations, they can offer ideas that the parents and the family may not have considered.

Communication and family conversations about money can be difficult but they are vital to properly executing a parent’s wishes in terms of the eventual transfer of their wealth to their children. A trusted financial advisor can help to facilitate and moderate these family discussions as well as guide them through the entire estate planning process. We encourage all of our clients to have ongoing family discussions regarding money and really open up the lines of communication. We are always here to listen, offer advice, and extend our fiduciary duty to serve the needs of our clients.

Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital.
Information provided in this blog is for educational purposes only and is not intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with own financial advisors, accountants, or attorneys regarding your individual circumstances as needed. No advice may be rendered by Arcadia unless a client service agreement is in place. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

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