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The Importance of Family Financial Meetings

Family conversations around money can be very hard, but a financial adviser can ease the way and help accomplish important estate planning goals.

Family money conversations can be difficult for parents and their adult children. Financial advisers can be instrumental in facilitating these types of critical money conversations for their clients via family financial meetings.

These conversations are a means for parents to express their wishes for the transfer of their wealth and for the children and other family members to both understand these wishes and perhaps to have a voice in the process. These are important and sometimes difficult conversations, but in this time of the COVID-19 pandemic, they may be even more urgent.

Parents’ Wishes

The key issue here is the parent’s wishes as far as transferring their wealth. If both parents are living and still married to each other it's likely that a primary concern is to provide for the surviving spouse’s needs first. Beyond this. they may wish to leave the bulk of their estate to adult children, grandchildren and perhaps other family members. They may also have charitable intentions.

While your clients may have expressed their wishes to you as their financial adviser, they may not have had these conversations with their kids and other family members.

Family Dynamics

Families are unique. Perhaps the parents are divorced, or one parent has already died. Perhaps your client is single and never married, but has relatives such as nieces and nephews they are close with and to whom they want to leave part of their estate.

Is there a lead child or family member who is most involved in the care of their parent or aging relative? Ideally the adviser should be in contact with this person in the course of planning this meeting.

There may also be family rifts that are reflected in the parent’s estate plans. All of this can play a role in these family financial meetings and may influence the family members who are involved. You should take all of this into account as you look to organize and facilitate a family financial meeting.

Inventory of Assets and Documents

As an adviser you’re familiar with situations where a client dies, and their heirs have trouble locating their assets or estate planning documents. A family financial meeting can be a good forum to ensure that the adult children are aware of not only the various financial and other assets owned by their parents, but where these assets are held. This might include investment and retirement accounts held by various custodians. It might also include other assets of various types, perhaps a rare stamp collection or artwork.

If your client has a will and estate planning documents in place this should be discussed as well.

Care Needs

Depending upon the age and health of the parents, a discussion of their healthcare needs is in order for this type of meeting. Do the parents have long-term care insurance in place, or have they made any arrangements to move into some sort of continuing care facility? What about Medicare or other health insurance? Do the children and other family members know the names of, and have contact information, for the parent’s doctors and other caregivers?

Elder financial abuse is a growing problem in our country. Have you noticed that your client seems to be under the influence of someone in terms of their finances? This person could be a friend or even a family member. This can be a touchy issue, especially if the abuser is a family member. The family financial meeting may be a forum to address this issue, or the potential for this type of situation, and have a plan to help other family members assist the client to help prevent such a situation from arising. This is a vital issue if the parent or older family member is experiencing mental lapses.

Benefits for the Adviser

For advisers, organizing and facilitating family meetings can have benefits.

First, of course, helping clients with their estate planning is part of what you likely do for them. Knowing that this is not only accomplished, but also creating a level of understanding of their wishes among their family members can provide peace of mind for your clients, which is satisfying for an adviser.

Retaining the assets they manage for clients when the client dies and those assets are passed to their heirs is a big problem for many advisers. While there are no guarantees, family financial meetings can be a great way to establish a relationship with the client’s children and other family members. This might lead to cultivating a relationship with them that results in their becoming your clients as well.