Do you want to keep your money in the family?

By Luma Wealth on April 23, 2019

5 Best Practices for Successful Family Meetings

Many people are uncomfortable talking about money with their families. However, an estimated 70% of families lose their wealth within one generation and 90% lose it by the second ¹, so these conversations may be worth having.

Family meetings are a strategy for wealth preservation commonly used by the ultra-rich and becoming increasingly popular among
the affluent. It’s a way to educate the next generation about managing money, talk about your values and tell the story about how your family’s wealth was created.

Generally, spouses, adult and teenage children and grandchildren are invited to attend a family meeting. Some families will also include younger children for age appropriate portions of the conversation, such as discussions about saving or charitable giving.

While each family’s meetings are distinct, there are common best practices which can make them more effective; including:

1 SET GOALS
Meetings should be planned ahead of time, with an agenda prepared to address specific, small and attainable goals. Solicit input from participants beforehand, so that family members know what to expect, are on-board with proposed discussion topics and feel like they are being heard.

Common topics covered at well-run family meetings include:

• Promoting financial literacy in future inheritors
• The family investment philosophy
• Family philanthropic values and activities, and how they are financially supported
• Family new business ventures and how to fund them

2 ESTABLISH RULES

A code of conduct can help keep participants engaged, conversations positive and the meeting constructive. Sample rules of behavior include
showing respect, refraining from interrupting and being present by turning off cell phones, which can help build trust.

3 ENCOURAGE PARTICIPATION

The most productive meetings are those in which family members feel comfortable sharing ideas. You can encourage discussion by asking openended questions. If your wealth advisor is facilitating the conversation, let him or her know, in advance, if there are family members you expect will need reassurance and encouragement to participate.

4 STAY POSITIVE

If conflict arises, keep the discussion on track by focusing on end goals or questions to answer. House unresolvable issues in a ‘parking lot’ to be settled at a later date, and take contentious conversations offline. Keeping conversations positive will help participants feel they can express their opinions safely.

5 FOLLOW UP

Summarize positive outcomes, assign action items and brainstorm topics and timing for the next meeting. Meeting minutes should detail decisions made and next steps, including tasks, responsible parties and time frames.

Luma Illuminations Family Meetings

¹ Generational Wealth: Why do 70% of Families Lose their Wealth in the 2nd Generation? https://bit.ly/2VGSBax