Estate planning can be a sensitive issue within families, and many people keep the difficult decisions about their wishes under lock and key. Even when every decision is made with careful consideration, future conflicts can arise—about the division of the family home or vacation property, the distribution of valuable or sentimental items, and any unequal division of assets among beneficiaries, among other things.
In our experience, a common scenario about a particular family asset goes like this: A successful Toronto couple owns a condominium in Whistler, B.C., and the vacation property is very special to the family. The couple decides to leave the condo to be equally owned and shared between their two adult children. It seems fair and simple enough but, as advisors, we would raise a few key questions: Have you talked to your children about whether they want the condo? Is your son who lives in Toronto going to use the property the same way your daughter in Vancouver will? Is dividing the property equally the right decision?
One of the best ways to reduce conflict and ensure you're making the best decisions is by holding a family meeting. In estate planning, the purpose of a family meeting is to have clear and open communication with your beneficiaries so they can understand your intentions, as well as express their own concerns and goals. Most people want their estate plan to play out in a way that is simple and easy and won't be a burden for the people who are left behind. A family meeting will help you accomplish that.
Of course, every family is different and your comfort level with what you're open to share—and how—will vary. For example, some people may not want to divulge details about the size of their children's inheritance out of concern that it will foster a sense of entitlement. In other situations, family dynamics may necessitate having separate, smaller meetings with individual beneficiaries. Whatever the situation may be, the foundational element is communication.
One question that often arises is: At what stage in estate planning do we hold a family meeting? The answer depends on your goals. Is your goal to communicate your plan and get buy-in on your decisions, or do you want to hear the voices of those you invited to the table before you draft your plan?
Recently, we worked with a married couple on their estate plan and the topic of their rental property came up. They had a strong belief that their children would want to keep the rental property as a source of income for the long term. During a family meeting, it was revealed that the children would rather sell it and not have to deal with the potential headaches of owning a rental property. The conversation helped the parents realize their children have different goals, and they could adjust their estate plan accordingly.
Getting it right
There are two important components to an effective family meeting: an advisor and an agenda. An advisor can help plan the meeting, which allows the family to, at the very least, get the meeting on the calendar rather than put it off. During the meeting, the advisor acts as a neutral third party to help guide the conversation and ensure the right points are being discussed. Meanwhile, having an agenda will help pinpoint the issues and ensure everyone stays on topic.
Having an advisor also helps if conflict arises, as family meetings often cover emotionally charged issues underscored by decades of family history. An advisor can set the tone of the meeting, communicate its purpose, and help you achieve your goals. While your family may not reach all conclusions or decisions by the end of the meeting, it's still a great opportunity for everyone to come together and have their voices heard—and, ultimately, make estate planning all the more successful.
If you're looking to get your family meeting underway, contact us. We can help.