Wednesday, November 26, 2014

Holding a family money summit---Why and How

"Be careful to leave your sons well instructed rather than rich, for the hopes of the instructed are better than the wealth of the ignorant," --  Epictetus, Greek philosopher. (55-135 A.D.)

Financial advisers recommend that families regularly hold "money-summits" to keep everyone in the loop on estate plans, wills and financial decisions. Once a tool of the ultra-wealthy, the family meeting is now used by families of all economic levels, says financial adviser Gordon Bernhardt.

This of course assumes that the people in your family are getting along, are reasonable and can listen to each other without interrupting. If the people in your family don't fit this "normal" profile then this post may not be helpful. Although there are tips below that may give you a strategy for handling that difficult family member.

The point here is that holiday family gatherings can be a time for good food, football and for (drum roll please) talking about money. (Just don't do it at the dinner table after everyone has had a few drinks.)

You might ask, why ruin a perfectly good family get-together by bringing up financial matters? Eventually, every family has the conversation. It just might not happen at a very good time, say when there’s an emergency because of a catastrophic illness or accident, or somebody’s funeral when family members turn to each other with blank looks because no body knows where the will is or what the person’s wishes are when it comes to health care or asset distribution or who is in charge.

Good estate planning, say advisers, is all about including all family members in the process. That means talking about it. But while everybody thinks these discussions are important, few actually have the conversations. Why? Because money is a touchy subject, people are afraid of offending each other by bringing up issues and some family members may be competing for influence for how the discussion goes, writes Robyn Post for in a post "How Families Can Talk About Money over Thanksgiving."

But parents who are still in charge of their finances and estate planning should talk to their kids and even grandkids about where their wills are, who might be assigned power of attorney when they become incapacitated and how assets will be distributed when they die. A big issue for baby boomers may be how to manage grandma, who at 90-something can no longer care for herself. (See previous post). You may believe that only the wealthy 1 percent need to have a family meeting about money. Not true. Tangible assets such as uncle George's clock, the handmade quilts from a great-great-grandmother or uncle Pete's car and savings account, may be worthwhile topics. Family get-togethers offer an opportunity to have a conversation about these all these issues.

How do you bring it up?

There are do’s and don’ts, experts say.

The No. 1 don’t: Don’t bring money matters or inheritance issues up at the holiday dinner table after everyone has had a few drinks. That may not go so well. Instead, let everyone know ahead of time that you’d like to talk about family money matters some time during the get-together. Set a time that’s convenient for everyone…after breakfast first thing; the day after the holiday or the afternoon before the family socializing starts. If you’d rather, have the money-summit as part of a family vacation or get-away some other time.

“Discussing your will and estate planning needs can be a tough topic because it requires coming to terms with mortality,” say advisers at Fidelity Investments. Your plans may stir reactions from some of your heirs. But a will and a financial plan also can lower the stress and give everyone (including you) peace of mind.

My ex-parents-in-law, who both died in their 90s a couple of years ago, held regular money summits with their two sons during holiday get-togethers. The meetings were behind closed doors, separate from any socializing or meals. No wives, no girlfriends, no grandchildren. It was about managing their assets while they were alive and how they would be distributed when they died. I have no idea what they talked about but as far as I know, the planning went well.  

My mother on the other hand struggled to remain in control but left herself open to bullying until she turned her asset management over to a bank trust department. That wasn't easy but she did it.

Barton Goldsmith writing for Psychology Today magazine offers these tips:
Keep your family meeting upbeat. You might begin with a light-hearted story or two. Ask for family remembrances from those attending. A family meeting is about communication, which can lead to better connections between family members, Goldsmith writes. If you keep the conversation light, it makes the communication easier.

Decide who you want in the meeting. Probably more inclusive is better than, not. Feelings can be hurt. There can be resentment. Every family is unique so plan a careful and thoughtful strategy.

Be creative with the meeting space. It could be a back yard, or a park. Go out. Maybe there’s a restaurant with a private space. Avoid the holiday dinner table.

Be flexible with the agenda. Ask those attending to talk about what’s been happening in their own worlds, what their future plans might be. Start off easy.

Consider one-on-one chats
Ideally, before the first meeting you might meet with each family member separately to hear their issues, give them a chance to talk one-on-one. Then put together a short agenda. First question…what would you like to accomplish as a family in the coming year, next year?

Hold these meetings regularly….twice a year or more, so everyone gets used to the format and the goals.
All of this assumes that families are not having troubles, that there are no dysfunctional family members who dominate discussions, who become emotional or angry. Who have an abuse problem or face financial difficulties.

If that’s the case, then careful advance planning may be needed. Or you may decide the holidays may not be the best time. A one-on-one conversation with each family member may be the only thing you do. Or, if you have a meeting, lay out clear ground rules for the discussion.

"Waiting until the holidays to tackle every money skeleton knocking around in your family’s closet may wind up putting you through a lot more stress than necessary," say writers at, a bank-sponsored Web site. "If time is on your side and you’d like to be more involved in the family’s financial planning then why not use the holidays to decide on a recurring time when you can meet throughout the year to check in on one another," they suggest.

Why are these conversations worth the effort?
Families need to plan for the future. There’s nothing worse than not talking about money, not talking about who you see handling your finances when you no longer can do it yourself. Surprises can leave bitter feelings that destroy relationships. 
This is heavy duty stuff. It gets more complicated and harder to do the longer issues are ignored.
Your children may be more likely to understand your planned distribution of property if they hear the motive behind your decisions directly from you, say Fidelity experts. Your children may have good ideas and opinions that can improve your plan. Talking about estate planning allows you to control how our children learn about your decisions….one-on-one or in a family conference.

First steps before a meeting
The first step is to write a will, designate who will have power of attorney, if you need help. Final wishes are also important. Those spell out your burial or cremation desires and what you want in a memorial or funeral service.

Things to consider: Setting up a trust to protect assets and ease the distribution process. Determining a charitable giving strategy. Writing a will outlines how you want your property distributed at your death or who will be your personal representative of your estate. A will provides for paying costs incurred in settling your estate.

There are many resources available to help with family estate planning through brokerage firms, at bank trust departments and certainly online.

Here are a few Web sites to get you started:
“How Families Can Talk About Money over Thanksgiving,” click here.
“Mediation for Family Money Disputes,”
click here.
"Holding a Monthly Family Financial Meeting," click here.
"The family meeting: An Essential Part of the Estate Planning Process," click here.
"What Would a Family Meeting Do for My Family?" - click here.
"How to Talk to Your Parents About Money," click here.
"Try a Family Meeting on Your Summer Vacation," click here.

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