By Teri Parker
The thought of talking about money with family members may make you feel apprehensive.
This is especially true if you’ve never had an intimate conversation about your finances with them. While it is simple to implement financial strategies for your well-being with an attorney or adviser, it’s not always easy to discuss these same plans with the people that you care about the most.
Feelings of resentment can become more pronounced between family members as they are relied on for help. One child often becomes the primary caregiver and may resent the others for not helping emotionally, financially, or physically. Eventually, they may withdraw from the family.
Family meetings can occur annually or more frequently, specifically to discuss finances, business, and family goals. These meetings should be established while you are of able body and a sound mind. They can help to facilitate conversations and expectations with your loved ones and prepare them for the responsibilities of managing your finances and assisting with care in the later years.
Talking about money may be one of the most difficult conversations to have with family, but, ironically, they can help to strengthen the bonds. Family meetings can provide a platform for healthy dialogue on topics that may never be discussed without such an opportunity.
Whether it is setting the appropriate expectations for your final care, long-term care, charitable gifting, or how the estate will be settled, having regularly scheduled family discussions about these financial affairs and more is invaluable.
Why these discussions are important
We may tell our children that we never want to live in an assisted living facility. What does that mean if you reach a point that you can no longer care for yourself? Can you afford a full-time care provider in your home? Do you have a family member who is willing to provide care in his or her home? Or will staying in your home mean that you will be relying on the combination of a family member for assistance and a part-time caregiver?
If you are living in an assisted-living facility, who will manage your finances? Are your family members aware of their future roles? Does your estate plan align with your current wishes? Do your family members know where you store your estate planning documents and have they met with your attorney?
Who will manage a vacation home intended to be held in the family as a legacy for your children and grandchildren? Are all your family members interested in this property? Or just one child?
A family heirloom, perhaps more sentimental than valuable, could cause a rift. Discussing intentions and the reason the item has been designated to one person could eliminate future friction or long-term resentment between family members.
Has one child borrowed a large sum of money and never paid it back? Will this loan be equalized in the estate or forgiven? If so, documenting intentions and discussing those plans openly with family members will help to mitigate any problems in the future.
Once you set the date for the first family meeting, outline the topics for discussion in advance of the meeting with an agenda. Begin the first meeting by talking about objectives and sharing important values. Plan on exchanging questions, concerns, hopes, fears about money and the future. Focus on the values that you share together as a family.
You may uncover a wide range of subjects that need more than one discussion. The first meeting should only address big-picture topics, understanding that future meetings will expand to cover more details and updates from prior meetings. The first meeting would not be the time to discuss the outstanding loan that a child has never paid back. It would be the appropriate time to discuss an ideal timeline for transitioning to a senior living community, planning a family vacation, or gifting to a favorite charity.
At a minimum, sharing desires for long-term care, the status of finances, and estate planning should occur at least once. Without this discussion, family members are bound to feel stressed and overwhelmed when it is time to help because they are blindly trying to manage the pieces of your life in a manner that they feel is in your best interest.
Some suggestions for worthwhile talking points are:
In concluding the first meeting, identify the action items necessary to complete. How often do you plan on meeting to continue the discussion? As with many of the variables that are addressed during these meetings, the frequency may change over time.
Money is necessary in life to survive but having loving family members who care about each other is priceless. Remind your family members that the purpose of family meetings is for unity and a smooth transition as you grow older and eventually die.
These meetings can be part of your legacy in preparing the family for the future. What is more satisfying than knowing your estate is in order, you will be cared for, and your children will continue to work together for the benefit of the entire family?
Teri Parker CFP® is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at Teri.firstname.lastname@example.org.