Background: Proper Estate Planning includes not just the Wills and important legal documents; it also involves ensuring assets are properly titled and beneficiaries are designated. These are things that simply cannot be done postmortem. Many people take the time to complete these important tasks, but few have open conversations with their families about such matters.
Our Case: B&E has served this family for generations. We are now engaging the 4th generation, at just 18 years old, in the early stages of investment and retirement planning. In addition to their wealth, each generation has had the desire to pass on various personal values as well. The first generation (G1) instilled a strong work ethic into generation two (G2). The second generation (G2) wants to add a philanthropic element to the transition to the third generation (G3). We will see what holds for the next generational transfer!
As G2, who we will now call “the parents,” transitioned the family business and updated their legal documents, they made the important decision to hold a family meeting, which B&E facilitated. All children and their spouses were included. In this meeting, the parents began with what was important to them – for understanding and harmony among all family members. Next, B&E described the legal documents and what is to take place. It included explaining Trusts, Wills, Powers of Attorney, and Health Care Directives. Each child had a role in carrying out the parents’ wishes.
A summary of assets and the disposition of each was included in the meeting. Specific amounts were not divulged, but a range of estimated values expected to be transferred was important to the parents. They wanted their adult children to know what might be coming and how they hoped each would make good use of what they received. The parents have very strong charitable desires and explained that they have created a legacy Donor Advised Fund that will continue beyond their time on earth. The parents shared a history of their charitable gifts, so the children knew the level of importance that philanthropy has to the parents.
The parents concluded the meeting reiterating their goal that all be involved to understand what will happen to the assets, home, and cabin at their passing. All this sharing in the hopes that the family love and harmony are not disrupted by any inheritance.
The Results: By B&E suggesting and facilitating this meeting, we are confident that everyone has the same information and understands the future estate distribution plan. An added benefit resulting from the meeting was that each of the children recognized how important their own estate documents were, and each subsequently began the process of their own family estate plan. Someday perhaps B&E will facilitate the meeting with their children!
Bottom Line: While some of us grew up in families where money was not a subject to be discussed, we find that having such family meetings before someone passes can enhance family harmony at a time when it eventually will be needed the most!
This is a hypothetical example for illustrative purposes only. The experience of this client may not be representative of the experience of all clients and is not indicative of future results. Any tax advice contained herein is of a general nature and is not intended for public dissemination. Further, you should seek specific tax advice from your tax professional before pursuing any idea contemplated herein. This advice is being provided solely as an incidental service to our business as financial planner. Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Financial Planning and Investment Advisory Services offered through B & E Investment Advisers, Inc., a State Registered Investment Adviser, Business & Estate Advisers, Inc., B &E Investment Advisers, Inc. and B&E Pension Advisers, Inc are separate entities from Valmark Securities. (1) Names have been changed to protect the client’s identity.
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