August 22, 2016
We have spoken in the past about the various family meetings we attend in our role as advisors to our family office clients. We continue to witness how invaluable these discussions are, and we encourage each of you to think about using such meetings as a way to improve communication within your family.
Some of you might think an organized family meeting is only for the very wealthy. I believe that is not the case. The financial and nonfinancial issues that face each family are unique, but every family can benefit from discussing its hopes, needs, values, and legacy.
A family meeting should not be solely about finances. Many families discuss how they interact with each other, their sense of community, and even their faith. Some families are able to join together for weekly dinners, but for most families assembling everyone is a difficult and expensive affair. Whatever the challenges, having everyone together to discuss the issues facing the family is vitally important, especially as family dynamics become more complex with the addition of spouses, grandchildren, and even great grandkids.
Recently we participated in multiday retreat with over twenty family members, which culminated in a highly productive, open, and moving discussion about the family assets, which are illiquid and closely held. Other meetings in which we have been involved have been less formal. Often they surround the retiring wishes of the family patriarch and/or matriarch. One very poignant recent meeting had to deal with the illness of the matriarch of the family, and her candid and heartfelt thoughts close to the end of her long and fulfilled life.
It is critically important to discuss the plan for the future of a family’s assets, however big or small, especially given the risk of increasing wealth taxation going forward. The low hanging fruit for revenue hungry, populist governments everywhere is taxing those with assets. We expect that the readers of this weekly will face ongoing demands for their capital as governments seek to reduce the divide between the “haves” and “have-nots”.
Those that have committed to holding regular family meetings comment that it has helped eliminate uncertainty and misunderstanding. In many families there is an initial reluctance to engage in frank dialogue about the issues surrounding money for variety of reason such as fear of upsetting somebody, or lack of knowledge about what should be discussed. Getting started with a process for regular family meetings is not easy. After all, parents often disagree over both the family’s financial goals, and the extent to which they should be shared with their children. Some parents even feel an open dialogue with their children is unwise.
We have heard all the excuses for not engaging the family, but an educated and thoughtful approach to include your children in discussions of your assets can produce results which would pleasantly surprise you. The fact that it is easier to avoid the issues by kicking the can down the road does not make this the right course of (in)action.