Richard English, J.D., Managing Director-West Region, Commerce Family Office
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Key Highlights
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Family meetings promote communication about family finances, can serve to engage younger generations in family wealth matters, and ultimately help cement values that are critical to preserving generational wealth. Conducting regular family meetings in a way that best suits your family priorities and dynamics can ensure family members are apprised of important family business, financial management, and estate planning matters.
Set a regular meeting cadence
Determining when and how frequently to meet may depend on a number of factors. Meeting at least once annually establishes a standing channel of communication between family members. When scheduling family meetings, you may consider planning the meeting around a particularly meaningful family event to convene for such important discussion. For example, is there an anniversary, holiday, or a time of the year when such planning discussions as a family unit feel in keeping with family tradition?
When determining how frequently to meet, it is important to consider how often is frequent enough to maintain good communication and ensure continuity on wealth matters as family members progress through different life stages and experience their own life changes. For example, children will bring more life experience and perspective to the meeting as they age from young adults starting their own independent lives to grown adults with their own careers and families.
And if there are particularly timely or urgent matters impacting the family or family business, perhaps it is helpful to meet more frequently until the immediate matter is resolved. If the desire is to have the most engaged participation by all family members, determining when and how often to convene may also require taking into account the practical consideration of family members’ schedules and other priorities. Whatever your family decides, maintaining a regular routine or cadence for family meetings will be key to maintaining good communication among the family and keeping alignment toward progress on long-term family goals.
Prepare an agenda before each meeting
Before the family meeting, think about your goals for the meeting and consider documenting them to form an agenda that can be shared in advance, giving participating family members enough time to prepare for the meeting. This will give your family members an idea of what will be discussed and help structure the meeting to keep everyone on topic.
What you want to include on a family meeting agenda is up to you. You may want to set objectives for what you want to accomplish in the meeting or spend time reinforcing your family’s wealth values by reviewing the family’s short-term and long-term wealth goals. Consider planning the agenda around a theme such as charitable giving, or a significant, upcoming family event.
The agenda may include a segment on financial education if younger generations are present. Building in time for the appropriate amount of family discussion or questions will be important to ensure participants feel genuinely involved and that their perspectives are heard.
If you are unsure where to start, consider engaging your private wealth management team to help you draft an agenda tailored to your goals. They can also be involved in presenting at the meeting as a guest speaker to explain more complex topics, such as the structure of the family trust, or to promote financial literacy by conducting an education session on a particular topic.
Select someone to lead the meeting
Choosing an effective meeting leader or facilitator can help participants adhere to the agenda and ensure the allotted amount of time for discussion is given to each topic. The family meeting leader can help set the tone for the meeting, providing emphasis on the points you want to reinforce and moderating the discussion to ensure everyone has a voice.
Selecting the most effective meeting leader will depend on what you are trying to achieve with the meeting and who can best lead the group toward the meeting goal. The ideal family meeting leader may be one of the heads of the family who represents the overall family vision they and their spouse envision for the family. Alternatively, the family meeting leader may be an objective third-party advisor who can lead a discussion of complex wealth topics from a position of subject matter knowledge and experience, ease potential tensions among family members with impartial facilitation, and whom meeting participants can trust with private family information, such as a member of your wealth management team or family office.
Allow for questions
A primary function of a family meeting is to foster open communication. As such it is crucial to make sure participants feel comfortable asking questions, so they feel heard and can clarify their understanding of the topics. The meeting leader can purposefully facilitate the time and space for questions as appropriate.
If younger generation family members ask questions whose answers may seem obvious, it is important to view those questions as opportunities to provide education. You may also learn about your family from the questions they ask and the discussion prompted by the responses of other family members.
By empowering your family members to ask questions and participate, you can normalize the discussion of sensitive topics like financial planning, succession, and wealth preservation, an approach that can benefit the entire family to ultimately help achieve long-term family goals.
Identify future roles and leaders of the family
Family meetings can be useful to gauge the relevant interests and capabilities of your family members, or to see how they handle responsibility for certain family wealth assignments, which may help you discover what roles younger members may be suited for in the future.
For example, you might assign a member of the next generation a task to research potential organizations that align with the family’s philanthropic goals and that the family might consider donating to. You may ask the family member to come to the next meeting prepared to share what they learned, such as the pros and cons of each organization, and bring their recommendation for which organizations to consider further.
Discussing how the assignment was handled and offering feedback gives your family members a hands-on learning opportunity to be an active part of the information gathering required before a decision is made. By seeing how the family member worked through their task, you might also gain insight into how that person might handle more pressing matters in the future. Through successively more involved assignments, you may be preparing or training them to take on greater family responsibility going forward.
Taking family dynamics into account
Intentionally planning with family dynamics as a consideration can help you navigate potential family tensions and inform your approach to family meetings. If there is a history of conflict between specific family members, it may be prudent to proactively have a plan to address disagreements if they arise.
If your family is just starting to establish a routine of family meetings, it may be wise to start with a smaller, core group of family where gaining alignment on the routine, roles, and family meeting norms may provide a level of family unity at the foundation. Deciding if and when to include in-laws and members of the younger generation is important, as these factors have the potential to change or impact the family meeting dynamic.
The important thing is to apply careful consideration to opening up participation so the meeting dynamic fits your vision and what is best for your family.
Scheduling the meeting venue
The selection of the meeting venue is a decision that can help set the tone for the meeting. If the objective is to create an environment where serious discussion will lead to a productive meeting, the venue may be a neutral location where family members feel no party has an undue advantage. Conversely, if you want to host the meeting in a relaxed atmosphere and combine the meeting with a family gathering, some families find that planning a family meeting around a family vacation creates a better environment to soften the effect of potentially challenging discussions.
You may even consider delegating the responsibility of planning the event to a family member or even rotating the responsibility among family members for each meeting to involve them in the meeting preparation.
Conduct effective family meetings with specialized assistance
Family meetings can help you communicate regularly with your family as you aim to strengthen family relationships and align on a unified effort to build, protect, and plan for your family’s generational wealth. For high-net-worth families, engaging the assistance of a trusted third-party advisor with specialized experience in generational wealth can be highly beneficial during these sensitive conversations.
At Commerce Trust, you and your family are served by a private wealth management team comprised of specialists in estate planning, investment management, trust administration, and tax management*. With our team-based approach, our professionals can facilitate family meetings, administer trust assets, and coordinate with your estate planning attorney or tax advisor to help you accomplish your financial goals.
Contact Commerce Trust today to learn more about our approach to educating and advising on how to incorporate practices for communicating with and involving your family in your wealth transfer planning.
*Commerce does not provide tax advice to customers unless engaged to do so.
The opinions and other information in the commentary are provided as of December 26, 2024. This summary is intended to provide general information only, and may be of value to the reader and audience
This material is not a recommendation of any particular investment or insurance strategy, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance or legal advice, and may not be relied on as such.
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