The Value of Adding a Family Roundtable to Financial Planning

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Northern Michigan financial planners hemming& Wealth Management explain the value of family financial transparency and how experts can make that a success.

It can be difficult enough to make individual decisions about finances, but many of those have ramifications that impact partners and children, too. So it makes sense to pull the team together to get on the same financial page. Enter the idea of a family financial round table.

Who It’s For

A common misperception is that financial planning and asset management are for people with plenty of assets to manage. “Not true,” says Autumn Soltysiak, a certified financial planner and partner at hemming& Wealth Management in Traverse City. “We see a lot of clients who are hardworking people—retired teachers, social workers, farmers.” She adds that sometimes those with few assets can benefit the most from a family meeting.

Take farmers, for example. “They may not be coming to the table with a large stock portfolio, but rather the bulk of the asset value is in their land. The family may not want to sell that off in order to equalize how things are divided among beneficiaries,” she says. A family meeting can help prevent the loss of a legacy property.

Another scenario is blended families, nearly 40 percent of married couples have previously been married. Getting everyone on the same page in a blended family is a situation financial planners see frequently. Say a husband and wife have blended finances, but they each also have kids from previous marriages. “If a spouse dies, how can we ensure the surviving spouse is taken care of as well as the children of the deceased?” Soltysiak says. The secret to success in that situation is to have the clients discuss their desired outcome ahead of time, and then bring the adult children into it. In one case, she helped the wife keep the couple’s home and balanced a fair payout to the husband’s children. “And fair doesn’t always mean ‘equal,’” she adds.

In actuality, a roundtable allows for peace of mind for anyone, regardless of net worth.

What a Family Meeting Looks Like

“There are two main scenarios we see for these meetings,” Soltysiak says. “Parents who are aging and want to finally share information with, and get the support of their kids, and younger parents bringing together young adult children to teach them about finances and get them started on the right foot.”

In both instances, there’s a desire to share a vision of financial health and legacy and to pass along financial values as well as to make practical arrangements that ensure assets and the wishes of clients are protected. Meetings can include immediate family as well as the family lawyer, accountant and financial planner. They can be one-time meetings to establish changes, or ongoing (such as semi-annual) to support an aging parent.

“The secret to success is to have a focus and a good understanding going into it,” Soltysiak says. “Is there a problem to be solved? Are we going to talk about inheritance?” For instance, you might be juggling investments, a lake house and three different kids with different desires and needs. That’s good to know upfront so the planner can put together an agenda and make sure everyone is heard.

It’s not just about talking things through; it’s also coordinating intentions with plans and documents and follow-through. “Oftentimes there’s a will or a trust, they’ve had these drawn up but their assets are never retitled into the trust, or they never change their beneficiaries,” Soltysiak says. “People can collect investments over time without coordinating those with what the estate documents say.” Another consideration is tax planning. Oftentimes, an accountant will prepare taxes for the lowest tax bill today without considering the tax bomb that might get passed on, she explains. “So sitting down together allows for really good integration of the planning.”

Secrets to Success

These are Soltysiak’s must-follow rules for a productive family roundtable:

  1. Respect. “For the client, the work they’ve already done, for their intentions and desires. Our job is along the lines of being the coach of the family meeting. Making sure there is open communication, that questions can be asked.”
  2. An agenda. “We always use an agenda to keep things organized.”
  3. Visual aids. “We find these really help us illustrate cash-flow planning.”
  4. An educational approach. “People are coming in with different backgrounds: We try to keep it at a conceptual level. Finances can be intimidating, so we never want to get into a situation where someone feels like they don’t belong at that table.”
  5. An agreed-upon purpose. “The purpose is usually directed by the client, so we honor that by keeping everyone involved focused there.”

Soltysiak recalls one successful meeting where the client was passionate about leaving the majority of their money to a nonprofit in town. “That was expressed ahead of time,” Soltysiak says. “When the client died, it was understood that’s where the money was going to go. The kids were really proud of that. There was no expectation that that money was coming to them.” In fact, she says, in most meetings she sees, adult children aren’t focused on inheritance but rather encouraging their parents to enjoy their assets in their senior years.

Successful meetings will even incorporate conversations about planning for long-term care or caring for elderly parents. “These are more lifestyle questions, but they’re pretty empowering,” Soltysiak says. Her advice: Talk about it before you get to the stress point. “Before the death, before you need long-term care, before there is confusion,” she says.

In the end, a roundtable is about passing on financial values—and finding peace. “From a client’s perspective,” Soltysiak says, “they may feel cautious about sharing their finances with family, but there’s something really freeing when they know their kids are cheering for them.”

By Cara McDonald